Oil and gas stocks surged on June 11 after a bullish outlook from Systematix Institutional Equities suggested robust operational and financial performance in FY26, despite recent volatility in global energy markets.
Systematix expects oil and gas companies under its coverage to report a 6% year-on-year rise in sales this fiscal, with EBITDA and net profit projected to grow 13% each. This optimism lifted nearly all constituents of the Nifty Oil & Gas index into the green. By 12:05 pm on June 11, shares of Reliance Industries, Indian Oil Corp., Oil India, Bharat Petroleum, and Hindustan Petroleum were up between 2–6% on the National Stock Exchange. The sectoral index was trading over 2% higher today.
Volatile Crude Prices, Strong Refining Margins
The sector’s upbeat forecast for the ongoing financial year comes despite a turbulent May for the oil market. Brent crude prices fell 23% year-on-year and 4% month-on-month amid a global supply rebound. Crude oil output of Organisation of Petroleum Exporting Countries recovered during the month, driven by Saudi Arabia and the UAE, as their production rose 1% and 2% on month, respectively, Systematix said.
Meanwhile, natural gas prices started correcting after February and spot LNG price averaged at $11.8 per million british thermal units in May, lower than $12.2 per mmbtu in April and $14.5 per mmbtu in February, the brokerage said.
On the refining side, the benchmark gross refining margins jumped 85% on month and 121% on year, mainly due to lower crude prices and improved product cracks, the report further said.
Systematix expects this trend to continue into FY27, projecting sales, EBITDA, and net profit growth of 8%, 9%, and 10%, respectively. It suggested that top investment picks include Reliance Industries, GAIL India, Mahanagar Gas, and Gulf Oil Lubricants.
The aggregate earnings of oil and gas firms under its coverage during the March quarter fell over 2% year-on-year, but jumped over 5% sequentially, Systematix said.
Fresh Boost: Domestic Shipping Push
Sentiment was also buoyed by reports that India’s state-run refiners plan to jointly procure 10 domestically built tankers vessels to transport fuels around the country as the government pushes ahead with its ambition to expand the shipbuilding industry. Indian Oil, Bharat Petroleum, and Hindustan Petroleum are expected to float a joint tender later this year, potentially worth $600mn, with deliveries set to begin by 2028.
These three stocks were among the top gainers in the Nifty Oil & Gas index. Indian Oil climbed 3.5% to an intraday high of ₹147.20, while BPCL and HPCL advanced 4% each.
Separately, Hindustan Petroleum is reportedly aiming to increase its Visakh Refinery's capacity to 18 million tonnes annually over the next 3–4 years, up from 15 million tonnes in FY25, according to Deccan Herald.
