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Natural Gas Stocks : Top Picks for 2024 for Indian Investors

Published Date: 04 Nov 2024Updated Date: 04 Nov 20246 mins readBy MOFSL

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Introduction

The demand for natural gas is steadily increasing as the world is gearing up for an energy-efficient and sustainable future. This has also transformed the Indian energy segment. With an increased effort to reduce the country's reliance on coal and tackle the environmental consequences of fossil fuels, natural gas has steadily gained popularity. This sector has also received significant investments due to this growing demand.

The natural gas market companies are involved in the research, identification, production, transportation and sale of natural gas. The shares of such companies are commonly known as natural gas stocks. Investing in these stocks gives investors a chance to earn attractive returns. Keep reading to discover the best natural gas stocks to invest in India in 2024 and factors to consider before investing.

2024's Best Natural Gas Stocks in India

Here are some of India's best natural gas stocks in India to invest in in 2024.

Reliance Industries Limited

Reliance Industries Limited, a titan in the Indian oil and gas sector, is known for innovation and a keen interest in renewable energy. This conglomerate runs one of the biggest natural gas plants in the world. Its primary areas of operations include the research, production, transport, and sale of natural gas. A 5-year Compound Annual Growth Rate (CAGR) of 21.22% and a P/E ratio of 29.53 depict this company's consistent financial growth and performance. This company's drive for large-scale activities makes it a player to be reckoned with in the Indian natural gas sector.

Oil and Natural Gas Corporation Limited

Oil and Natural Gas Corporation (ONGC), a pioneer in the Indian natural gas market, is actively involved in discovering, growing, and supplying natural gas and oil resources. With several on and offshore operations managed locally and globally, it is a crucial player in the Indian natural gas sector. Its offshore operations include the processing, shipping, and sale of natural gas. With a 5-year CAGR of 22%, a P/E ratio of 9.05, and a vertically integrated company structure, it is a top choice for investors.

Gas Authority of India Limited

Gas Authority of India Limited (GAIL) is actively involved in the processing, transporting and selling of natural gas via a vast network of pipelines nationwide. This state-owned company maintains several natural gas import ports and is also a prominent player in city-wise delivery of natural gas. Though it has a stake in petroleum production, it's also focused on greener energy projects. Its well-diversified operations make it a prominent player in the natural gas sector. GAIL's steady growth is apparent through its 5-year CAGR of 22.20% and a P/E ratio of 13.77, making it a good choice for investors.

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Petronet LNG Limited

This company's primary activities involve importing and processing liquified natural gas (LNG). It also owns several large LNG ports where LNG is transformed into its natural gas form. With the growing gas demands in India, Petronet is also diversifying into new avenues, such as small-scale distribution of LNG. With a 5-year CAGR of 7.40% and a P/E ratio of 14.07, this company is one of the best natural gas stocks for Indian investors.

Gujarat Gas Limited

Gujarat Gas Limited is a state-owned gas delivery company with an extensive network of delivery facilities. It fosters the sale of natural gas for private, industrial, business, and commercial use across different areas of Gujarat. This company's steadily growing delivery network and customer base are in sync with the State's objectives of using natural gas as a cleaner fuel option. With a 5-year CAGR of 27.22% and a P/E ratio of 33.91, Gujarat Gas Limited's stocks are among the leading options for Indian investors.

Factors to Consider Before Investing

Before you decide to invest in natural gas stocks, consider the following.

The most important consideration is the company's financial performance, including its past track record, management, and operations.
This sector's demand and profitability are reliant on government regulations. Stay abreast of the latest and potential regulations that might affect this sector.
Assess how the companies in the sector address social and environmental concerns, as this influences their stock prices.
Keep an eye on gas prices since they directly influence the stock market's performance.

Conclusion

Global energy needs are steadily growing with population and income levels. There's also growing public concern for developing cleaner and sustainable fuels. One such option is natural gas. The increasing demand for this resource has propelled the growth of companies in this sector. Investing in natural gas stocks offers attractive returns. However, before making any investment decision, consider your risk appetite and investment goals and do the required research.