India is one of the fastest-growing economies in the world, and with this growth comes an increasing demand for energy. As the country continues to invest in renewable energy and looks to reduce its dependence on fossil fuels, there are some exciting opportunities for investors in the energy sector.
If you’re looking to invest in energy stocks in India, it’s important to do your research and choose companies that are well-positioned to benefit from these trends.
In this article, we’ll take a closer look at some of the best energy stocks in India and what makes them a compelling investment opportunity.
Table of Contents
Understanding Energy Stocks
Energy stocks are shares of companies that are involved in the production, exploration, and distribution of energy. Energy stocks are shares of publicly traded companies in this sector. Some of the top categories for energy stocks include:
- Oil and gas exploration and production: These companies are involved in the exploration, extraction, and production of oil and gas. They may also be involved in the transportation and processing of these resources.
- Oilfield services: These companies provide equipment, technology, and services to oil and gas exploration and production companies. This includes drilling services, well maintenance, and oilfield equipment manufacturing.
- Refining and marketing: These companies refine crude oil into petroleum products and market them to consumers. This includes gasoline, diesel fuel, and other petroleum-based products.
- Renewable energy: These companies focus on producing energy from renewable sources such as solar, wind, hydropower, and geothermal. They may also provide related products and services such as energy storage solutions.
- Utility Stocks – Utility stocks refer to stocks issued by companies that provide essential services such as electricity, natural gas, and water to consumers and businesses. In the energy sector, utility stocks include companies that generate and distribute electricity and natural gas to customers.
List of Best Energy Stocks in India 2023
| Stocks Name | Market Cap (Cr) | P/E Ratio | 1 Yr. Return (%) |
|---|---|---|---|
| Reliance Industries | 15,69,000.18 | 37.83 | -11.2% |
| ONGC | 1,92,981.48 | 4.57 | -10.6% |
| Oil India | 28,525.28 | 4.29 | +9.1% |
| IOCL | 1,08,874.75 | 25.89 | -5.2% |
| BPCL | 71,010.49 | 24.80 | -13.2% |
| HPCL | 31,938.62 | 4.88 | -20.1% |
| MRPL | 9,577.95 | 2.56 | +9.00% |
| Adani Total Gas | 89,359.57 | 178.23 | -65.7% |
| GAIL India | 69,400.18 | 9.4 | -1.6 |
| Indraprastha Gas | 30,835.04 | 20.88 | +8.00% |
(Data as of April 4, 2023)
Disclaimer: The securities quoted are exemplary and not recommendary. Past performance is not indicative of future returns.
Best energy stocks in India 2023 — Overview
1. Reliance Industries (NSE: RELIANCE)
Reliance Industries Limited is one of the largest companies in India and is widely regarded as a leader in the refining and petrochemicals sector. The company has a diversified portfolio that includes businesses in the fields of oil and gas exploration, refining, petrochemicals, and telecommunications, among others. However, it is the refining segment that has been a major contributor to Reliance’s success over the years.
Reliance’s refining business operates two refineries in India, with a combined capacity of 1.24 million barrels per day. The Jamnagar Refinery, located in Gujarat, is the world’s largest refining complex, with a capacity of 1.2 million barrels per day.
Reliance Industries shares trade at ₹ 2,325.85 (on April 5th, 2023, at 7:44 PM IST).
Fundamentals
Market Cap: ₹15,77,362 Cr
- P/E Ratio(TTM): 24.81
- Debt to Equity: 0.40
- ROE: 8.21%
- Face Value: 10
2. Oil & Natural Gas Corporation (NSE:ONGC)
Oil and Natural Gas Corporation (ONGC) is one of the largest energy companies in India and a significant player in the global energy market. It operates in various segments, including exploration and production, refining, petrochemicals, and others. ONGC’s primary business is to explore, produce, and market crude oil, natural gas, and other value-added products.
ONGC has a total of 110 fields, out of which 65 are offshore and 45 onshore. In addition, the company has 13 producing assets outside India, which gives it a global presence.
ONGC shares trade at ₹ 150.90 (on April 5th, 2023, at 7:50 PM IST).
Fundamentals
Market Cap: ₹1,93,296 Cr
- P/E Ratio(TTM): 4.57
- Debt to Equity: 0.54
- ROE: 18.95%
- Face Value: 5
3. Oil India Limited (NSE:OIL)
Oil India Limited (OIL) is one of the leading oil and gas exploration and production companies in India. Oil India Limited (OIL) is one of the leading oil and gas exploration and production companies in India.
OIL has a total of 26 producing fields, out of which 14 are offshore and 12 onshore. In addition, the company has producing assets in the USA, Venezuela, Libya, and Gabon, which gives it a global presence.
OIL shares trade at ₹ 261.85 (on April 5th, 2023, at 7:52 PM IST).
Fundamentals
Market Cap: ₹28,135 Cr
- P/E Ratio(TTM): 3.09
- Debt to Equity: 0.48
- ROE: 20.73%
- Face Value: 10
4. Indian Oil Corporation (NSE:IOC)
Indian Oil Corporation Limited (IOCL) is one of the largest integrated oil and gas companies in India. The company was established in 1964 and is a state-owned enterprise. IOCL’s primary business is to refine crude oil and market petroleum products in India and overseas.
IOCL has a strong refining and marketing presence in India, with 11 refineries and a network of over 28,000 retail outlets. The company is the market leader in the Indian petroleum products market, with a market share of over 50%.
IOCL shares trade at ₹ 77.70 (on April 6th, 2023, at 7:52 PM IST).
Fundamentals
Market Cap: ₹1,08,945 Cr
- P/E Ratio(TTM): 17.27
- Debt to Equity: 1.26
- ROE: 20.46%
- Face Value: 10
5. Bharat Petroleum Corporation (NSE:BPCL)
Indian Oil Corporation Limited (IOCL) is one of the largest integrated oil and gas companies in India. The company was established in 1964 and is a state-owned enterprise. IOCL’s primary business is to refine crude oil and market petroleum products in India and overseas.
IOCL has a strong refining and marketing presence in India, with 11 refineries and a network of over 28,000 retail outlets. The company is the market leader in the Indian petroleum products market, with a market share of over 50%.
BPCL shares trade at ₹ 332.00 (on April 6th, 2023, at 7:57 PM IST).
Fundamentals
Market Cap: ₹70,938 Cr
- P/E Ratio(TTM): 24.80
- Debt to Equity: 1.73
- ROE: 22.15%
- Face Value: 10
6. Hindustan Petroleum Corporation (NSE:HINDPETRO)
Hindustan Petroleum Corporation Limited (HPCL) is a leading oil and gas company in India. The company was established in 1974 and is a state-owned enterprise. HPCL’s primary business is to refine crude oil and market petroleum products in India and overseas.
HPCL has a strong refining and marketing presence in India, with three refineries and a network of over 18,000 retail outlets. The company is one of the major players in the Indian petroleum products market, with a market share of over 10%.
HPCL shares trade at ₹ 227.90 (on April 6th, 2023, at 8:01 PM IST).
Fundamentals
Market Cap: ₹32,010 Cr
- P/E Ratio(TTM): 4.88
- Debt to Equity: 2.65
- ROE: 18.35%
- Face Value: 10
7. Mangalore Refinery Petrochemicals (NSE:MRPL)
Mangalore Refinery and Petrochemicals Limited (MRPL) is a leading petroleum refinery and petrochemical company in India. The company was established in 1988 and is a subsidiary of Oil and Natural Gas Corporation Limited (ONGC). MRPL’s primary business is refining crude oil and marketing petroleum products in India and overseas.
MRPL has a strong refining capacity of 15 million metric tonnes per annum (MMTPA), making it one of the largest petroleum refineries in India. The company’s state-of-the-art refinery is equipped with advanced technology and has a high operational efficiency.
MRPL shares trade at ₹ 54.25 (on April 6th, 2023, at 8:05 PM IST).
Fundamentals
Market Cap: ₹9,631 Cr
- P/E Ratio(TTM): 2.57
- Debt to Equity: 2.26
- ROE: 51.64%
- Face Value: 10
8. Adani Total Gas (NSE:ATGL)
Adani Total Gas Limited (ATGL) is a leading player in the Indian natural gas distribution sector. The company is a joint venture between Adani Group and Total S.A, a French multinational oil and gas company. ATGL is responsible for the distribution of natural gas in several cities across India, including Ahmedabad, Vadodara, Faridabad, and Khurja.
ATGL is one of the largest natural gas distribution companies in India, with a presence in 22 states and over 90 cities. The company’s strong market position is due to its focus on providing high-quality and reliable natural gas services to its customers. ATGL’s customers include industrial, commercial, and residential consumers, providing the company with a diversified revenue stream.
ATGL shares trade at ₹ 863.00 (on April 6th, 2023, at 8:09 PM IST).
Fundamentals
Market Cap: ₹90,399 Cr
- P/E Ratio(TTM): 170.54
- Debt to Equity: 0.45
- ROE: 23.42%
- Face Value: 1
9. GAIL India (NSE:GAIL)
GAIL India Limited is one of the largest natural gas processing and distribution companies in India. The company is primarily engaged in the transmission and distribution of natural gas, as well as the production and marketing of petrochemicals.
GAIL India Limited has a dominant position in the Indian natural gas industry, with a significant share of the natural gas transmission and distribution market. The company has a strong brand reputation, and its vast pipeline network ensures efficient and reliable delivery of natural gas to consumers across the country.
GAIL shares trade at ₹ 105.45 (on April 6th, 2023, at 8:15 PM IST).
Fundamentals
Market Cap: ₹69,302 Cr
- P/E Ratio(TTM): 8.29
- Debt to Equity: 0.22
- ROE: 20.90%
- Face Value: 10
10. Indraprastha Gas (NSE:IGL)
Indraprastha Gas Limited (IGL) is a leading Indian company engaged in the distribution of natural gas. The company primarily operates in the Delhi-NCR region and has a significant presence in the compressed natural gas (CNG) and piped natural gas (PNG) segments.
IGL has a dominant market position in the Delhi-NCR region, where it has exclusive rights to distribute natural gas in the area. The company’s vast distribution network ensures reliable and efficient supply of natural gas to its customers, including households, commercial establishments, and industrial users.
IGL shares trade at ₹ 460.45 (on April 6th, 2023, at 8:20 PM IST).
Fundamentals
Market Cap: ₹31,052 Cr
- P/E Ratio(TTM): 18.56
- Debt to Equity: 0.01
- ROE: 21.58%
- Face Value: 2
This is not an investment advisory. The blog is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Factors Affecting Energy Stocks in India
There are several factors that can affect energy stocks in India. Here are some of the key factors:
- Global oil prices: Global oil prices have a significant impact on energy stocks in India. As India is heavily dependent on oil imports, any fluctuations in global oil prices can have a direct impact on the profitability of energy companies in India.
- Government policies: Government policies play a crucial role in shaping the energy sector in India. Policies related to subsidies, taxes, and regulations can have a significant impact on the profitability of energy companies. For example, the government’s push towards renewable energy sources can impact the profitability of traditional energy companies.
- Demand and supply: The demand for energy products such as oil, natural gas, and electricity is affected by various factors such as economic growth, weather conditions, and technological advancements. Any changes in demand and supply can impact the stock prices of energy companies.
- Economic Growth: Economic growth is a key factor that affects energy stocks in India. As the economy grows, the demand for energy increases, leading to higher profits for energy companies. On the other hand, a slowdown in the economy can lead to lower demand for energy and lower profits for energy companies.
- Competition: The energy sector in India is highly competitive, with both public and private players vying for market share. Changes in the competitive landscape can have an impact on the stock prices of energy companies.
Advantages of Investing in Energy Stocks
Investing in energy stocks can have several advantages. Here are some of the potential benefits:
- High potential for growth: Energy stocks have a high potential for growth due to the increasing demand for energy worldwide. As the population grows and economies develop, the demand for energy will continue to rise, leading to potential growth in the energy sector.
- Diversification: Investing in energy stocks can provide diversification to your investment portfolio. Energy stocks can be found in various sectors such as oil and gas, renewable energy, and utilities, providing a range of investment options.
- Regular income: Many energy stocks offer regular dividends, which can provide investors with a reliable source of income.
- Hedge against inflation: Energy stocks can act as a hedge against inflation as energy prices tend to rise with inflation. This means that energy stocks can help protect your portfolio from the negative effects of inflation.
FAQ on Best Energy Stocks in India
Are energy stocks a good investment?
Energy stocks can be a promising investment during times of economic expansion. Investing in energy stocks as the economy moves from a period of decline to growth can potentially yield good returns.
Currently, energy stocks have the highest dividend yield of any sector in the stock market, which is linked to their high levels of free cash flow. This means that companies with strong cash flow have the ability to pay higher dividends to their shareholders.
Are Energy Stocks Risky?
Investing in energy stocks comes with inherent risks, much like any other investment. The energy industry is subject to various external factors that can impact its performance, including changes in government regulations, geopolitical events, and fluctuations in commodity prices.
Are Energy Stocks Volatile?
Yes, energy stocks can be volatile. The energy sector is heavily influenced by factors such as commodity prices, geopolitical events, and supply and demand dynamics, which can lead to fluctuations in stock prices. Additionally, changes in government policies, technological advancements, and shifts in consumer preferences can also impact the performance of energy stocks. As a result, energy stocks may experience periods of high volatility, which can make them riskier investments. However, this volatility can also provide opportunities for investors who are willing to assume the associated risks in order to potentially achieve higher returns.
