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Top oil and gas sector stocks to invest in India in 2024

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Published Date: 26 Mar 2024Updated Date: 15 Jan 20256 mins readBy MOFSL
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Introduction:

As we step into 2024, the global energy landscape continues to evolve, and the Indian oil and gas sector remains a critical player in it. Additionally, the oil and gas sector has contributed significantly to India's economic growth and Gross Domestic Product (GDP), accounting for two-thirds of the nation's primary energy requirements. 

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As a result, investors are keenly eyeing opportunities in this sector and seeking stocks that promise potential growth and long-term stability. In this blog, you will delve into the top oil and gas sector stocks in India in 2024, exploring their past performance, market position, and future growth prospects. Continue reading.

What are oil and gas sector stocks?

Oil and gas sector stocks refer to the publicly traded stocks of companies listed on the stock exchanges and engaged in the exploration, production, refining, and distribution of natural oils and gases. 

Government initiatives, such as the Open Acreage Licensing Policy (OALP) and the Pradhan Mantri Ujjwala Yojana (PMUY), have significant implications for companies in the oil and gas sector, influencing their stock performance. However, it’s crucial to note that oil and gas sector stocks can be highly volatile, given the cyclical nature of the industry. Furthermore, external factors can greatly influence fluctuations in oil and gas share prices.

Top oil and gas sector stocks in India in 2024

Identifying the best oil and gas sector stocks in India can be challenging for investors, given the dynamic global landscape and constantly changing prices. To help you out, we have handpicked the top oil and gas sector stocks in India that you can add to your portfolio in 2024 with a long-term investment horizon:

1. Reliance Industries Limited

Reliance Industries Limited (RIL) is a giant in the Indian oil and gas sector. Its diversified business model, including refining, petrochemicals, and oil exploration, makes it as a key player in the industry. With strategic partnerships and investments in technology, RIL is well-poised for future growth. The launch of Jio-BP, a joint venture with BP, further strengthens its presence in the energy sector.

As of 28 February 2024, RIL shares were trading for Rs. 2,911.25 per share at the National Stock Exchange (NSE) and Rs. 2,909.00 per share at the Bombay Stock Exchange (BSE). The company’s market capitalisation stood at Rs. 20,09,679 crores.

2. Adani Total Gas Limited

Adani Total Gas Limited is India’s largest private sector-listed city gas distribution company. Its primary venture partners include the Indian Oil Corporation and the French Energy Major Total. Currently, Adani Gas Limited serves approximately 38 regions, covering 8% of India's population.

As of 28 February, Adani Total Gas Limited shares were trading for Rs. 1,018.90 at the NSE and Rs. 1,018.95 at the BSE. The company’s market cap and P/E ratio stood at Rs. 1,15,194 crores and 192.89 respectively. 

3. Oil and Natural Gas Corporation (ONGC)

As a leading exploration and production company, ONGC is a vital player in the Indian oil and gas sector. With a vast portfolio of domestic and international projects, ONGC plays a vital role in meeting India's energy needs. Investors may find ONGC attractive due to its stable revenue streams and government backing.

As of 28 February, ONGC shares were trading for Rs. 265.75 per share at the NSE and Rs. 265.35 per share at the BSE. The one-year return of these shares stood at 71.75%.

4. GAIL (India) Limited

GAIL (India) Limited boasts an extensive network of natural gas pipelines, spanning approximately 15,583 kilometres. Apart from serving a crucial role in the gas sector, the company has a significant presence in renewable energy. As of February 2024, it commands a market share of around 50% in gas trading and 70% in gas transmission.

Upon market close on 28 February 2024, GAIL (India) Limited’s shares were trading for Rs. 179.35 per share at the NSE and Rs. 179.25 per share at the BSE. The market cap stood at Rs. 1,18,681 crores.

To conclude

Investing in the oil and gas sector stocks calls for a careful examination of market dynamics, company strategies, and global energy trends. While these four companies represent the top players in India’s oil and gas sector, you must conduct thorough research, consider risk factors, and stay updated on industry developments to make well-informed investment decisions.

 

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Disclaimer: The stocks, companies, or financial instruments mentioned in this blog are for informational purposes only and should not be considered as investment recommendations. It is advised to consult with your financial advisor before making any investment decisions. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. Investors are strongly encouraged to carefully read the risk disclosure documents prior to participating in market-related investments or trading activities. Due to the volatile nature of financial markets, no guarantees can be made regarding investment returns. Motilal Oswal Financial Services Ltd. does not offer any assured returns on market-linked securities. Please note that past performance of stocks or indices is not indicative of future results.
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