7 Best Oil and Gas Stocks in India 2025: Expert Insights and Top Picks

India’s oil and gas sector remains a crucial pillar of the nation’s economy, powering transportation, industry, and domestic consumption. As the world’s third-largest energy consumer, India’s energy demand continues to surge, driven by economic growth and urbanization. The oil and gas industry in India is a blend of large public sector undertakings (PSUs) like ONGC and Indian Oil, and private players such as Reliance Industries, all of whom play a critical role in ensuring energy security and stability.

In 2025, investing in the best oil and gas stocks in India becomes even more relevant. With the government’s push for energy self-reliance, policy reforms, and robust demand outlook, these stocks are expected to offer long-term growth opportunities. This sector also benefits from India’s ongoing efforts to diversify its energy mix, including an increasing focus on natural gas and cleaner fuels. For investors seeking exposure to top energy stocks in 2025, understanding these dynamics can unlock significant potential.

7 Best Oil & Gas Stocks to Invest in India 2025

Why Invest in Oil & Gas Stocks in 2025?

India’s domestic energy demand is expected to grow steadily, underpinned by rapid urban expansion and infrastructure development. Government policies, such as ONGC’s exploration support and plans to privatize select PSUs, provide a solid foundation for growth in this sector. Moreover, while crude oil price volatility remains a factor, it often translates into trading opportunities for agile investors.

India’s heightened focus on energy security and reduced import dependency will further bolster the oil and gas sector. Companies are adapting to green energy shifts by investing in cleaner fuels, gas-based infrastructure, and renewable energy segments, thus ensuring long-term sustainability. These developments make oil sector stocks for long-term investment in India a compelling choice for those seeking balanced exposure to both traditional and evolving energy markets.

1. Bharat Petroleum Corporation Ltd (BPCL)

BPCL, a major player in India's downstream sector, boasts a market capitalization of ₹1.37 trillion as of May 2025. With a revenue of ₹4.40 trillion and a P/E ratio of 10.38, the company demonstrates robust financial health. BPCL is actively investing in renewable energy initiatives, including nanotechnology applications in refining processes. Analysts maintain a stable outlook on the stock, highlighting its consistent dividend payouts and strong government backing. However, investors should be mindful of its low ROE and exposure to refining margin volatility.

2. Indraprastha Gas Ltd (IGL)

IGL operates in the midstream/downstream segment, focusing on city gas distribution. As of May 2025, it has a market cap of ₹28,812 crore. The company reported a net sales of ₹14,928  crore and maintains a P/E ratio of 16.77. IGL is expanding its clean energy solutions and infrastructure in urban areas. Analyst sentiment is positive, with 11 strong buy ratings out of 31 analysts. While the company shows consistent performance and a focus on clean energy, it faces regulatory risks and competition in urban markets.

3. Mahanagar Gas Ltd (MGL)

MGL, another key player in city gas distribution, has a market capitalization of ₹13,473 crore as of May 2025. The company reported a net profit of ₹1,040.57 crore, with a P/E ratio of 13.17 and a dividend yield of 2.20%. MGL has been recognized as a top pick in the oil and gas sector by analysts, with expectations of 17-28% upside. Its strong position in Mumbai's gas distribution and stable earnings are notable, though it faces challenges in geographical expansion and regulatory compliance.

4. Reliance Industries Ltd (RIL)

RIL is an integrated conglomerate with operations spanning upstream, midstream, and downstream segments. As of May 2025, it holds a market cap of ₹19.36 trillion and reported a revenue of ₹9.65 trillion. The company is diversifying into AI, solar photovoltaic modules, and battery gigafactories, aiming to become one of the world's top 30 most valuable companies. Analysts maintain a stable outlook, focusing on RIL's long-term growth prospects. While its diversified portfolio and strong leadership are strengths, the high P/E ratio and exposure to multiple sectors present considerations for investors.

5. Oil India Ltd (OIL)

OIL primarily operates in the upstream segment, with plans for downstream expansion. As of May 2025, it has a market cap of ₹69,285 crore and reported a revenue of ₹32,512 crore. The company is focusing on upstream acreage expansion and downstream operations. Analyst sentiment is positive, with a focus on growth strategies. OIL's low P/E ratio and government support are advantages, though it remains exposed to crude oil price volatility.

6. Oil and Natural Gas Corporation Ltd (ONGC)

ONGC is a major upstream operator with a market capitalization of ₹3.07 trillion as of May 2025. The company has a P/E ratio of 8.04 and continues to focus on exploration and production activities. ICICI Securities maintains a 'Buy' rating with a revised target price of ₹350. ONGC's strong government backing and low P/E ratio are positives, but it faces high exposure to global oil price fluctuations.

7. Selan Exploration Technology Ltd (SELAN)

SELAN operates in the upstream segment, focusing on exploration and production. As of May 2025, it has a market cap of ₹846 crore and reported a revenue of ₹258 crore. The company operates oilfields in Gujarat with 100% ownership. While SELAN's focused operations present potential for growth, its small market cap and limited liquidity are considerations for investors

Key Risks & Challenges

Despite the promising outlook, investors must stay vigilant about certain challenges in the sector. Crude oil price volatility can significantly impact earnings and stock prices, requiring a disciplined investment approach. Regulatory changes, including environmental standards and taxation policies, can also affect company profitability. Additionally, the accelerating global push for green energy and the risk of stranded fossil fuel assets pose medium- to long-term challenges.

Geopolitical tensions and currency exchange fluctuations add further layers of complexity. Being aware of these risks helps investors build a more balanced and resilient portfolio within the oil and gas sector.

Expert Tips: How to Choose the Right Oil & Gas Stock

1. Segment Exposure: Evaluate whether a company operates in upstream (exploration and production), downstream (refining and marketing), or integrated segments, as this affects earnings volatility and growth prospects.

2. Debt-to-Equity Ratios: Companies with manageable debt levels are better positioned to weather sectoral downturns.

3. Government Stake: Many Indian oil & gas PSUs are undergoing reforms and partial privatization, which can unlock value for shareholders.

4. Dividend History: Steady dividend payouts indicate a company’s robust cash flows and commitment to shareholder returns.

5. ESG Compliance: Prioritize firms making strides in environmental, social, and governance practices for long-term viability in a transitioning energy landscape.

Conclusion

In 2025, the best oil and gas stocks in India—such as Reliance Industries, ONGC, Indian Oil, and stand out for their strategic positioning and robust fundamentals. However, investors should diversify within the sector to mitigate risks while capturing growth opportunities. As India’s energy landscape evolves, consulting with sector experts or using specialized investment tools like Samco’s offerings can help you identify the top energy stocks 2025 and make informed investment decisions.