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Oil & gas stocks RIL, ONGC, Oil India, GAIL, and Gujarat Gas are top buys according to JM Financial.
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JM Financial ratings suggest selling HPCL and IGL, while upgrading MGL, PLNG, and GSPL to ‘Add’.
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Earnings outlook shows mixed performance across oil, gas, and energy companies for Q2.
Oil & Gas Stocks: JM Financial Names Top Buys and Sells
Oil & gas stocks have seen renewed investor interest as JM Financial released its latest sector ratings. The brokerage has recommended a ‘Buy’ for Reliance Industries (RIL), ONGC, Oil India, GAIL, and Gujarat Gas, citing strong growth potential and solid fundamentals.
Conversely, JM Financial suggested selling HPCL and Indraprastha Gas (IGL) due to limited upside. Other companies, including BPCL, IOCL, Mahanagar Gas (MGL), Petronet LNG (PLNG), and Gujarat State Petronet (GSPL), received revised recommendations under the new rating framework.
JM Financial Ratings: RIL Maintains Strong Buy Recommendation
Among oil & gas stocks, JM Financial reaffirmed a ‘Buy’ rating on RIL with an unchanged target price of ₹1,700. The brokerage highlighted RIL’s industry-leading position across multiple businesses and projected a 15–20% EPS CAGR over the next 3–5 years.
JM Financial also noted that Jio’s ARPU growth of 13% CAGR during FY25–28 is a structural driver supported by industry trends. Analysts believe these factors will help RIL sustain growth in its digital, retail, and energy segments, making it one of the most attractive oil & gas stocks in the current market.
Oil & Gas Stocks: ONGC and Oil India Remain Strong Buys
For other oil & gas stocks, JM Financial reiterated a ‘Buy’ on Oil India (target price revised to ₹515) and ONGC (target price revised to ₹285). The brokerage observed that current market prices reflect a Brent crude assumption of $60 per barrel, whereas its forecast is $70 per barrel, indicating potential upside.
JM Financial prefers Oil India for its strong earnings compounding potential over the next 2–3 years. Both companies are expected to show steady earnings performance in the near term, reinforcing their position as leading oil & gas stocks for long-term investors.
JM Financial Ratings: Sell Recommendations for HPCL and IGL
Among oil & gas stocks, HPCL and IGL have been given a ‘Sell’ rating. JM Financial highlighted limited growth potential for these companies after recent rallies, suggesting that investors consider reducing exposure.
While other energy and gas companies have shown mixed performance, the brokerage believes that HPCL’s and IGL’s earnings may face pressure due to moderation in auto fuel gross margins and changing market conditions. These JM Financial ratings serve as guidance for cautious positioning in these stocks.
Oil & Gas Stocks: Upgrades for MGL, PLNG, and GSPL
The brokerage also upgraded Mahanagar Gas (MGL), Petronet LNG (PLNG), and Gujarat State Petronet (GSPL) to ‘Add’ from earlier Sell/Hold ratings. This comes after recent stock corrections addressed key concerns and reduced downside risks.
JM Financial highlighted that these oil & gas stocks are better positioned to benefit from current market conditions, offering investors potential for moderate gains while limiting downside.
JM Financial Ratings: Downgrades for BPCL and IOCL
Among oil & gas stocks, BPCL and IOCL were downgraded from ‘Hold’ to ‘Reduce’. JM Financial noted that these stocks have already rallied significantly, leaving limited room for further upside.
Investors are advised to monitor price action and earnings updates closely before adding these stocks to their portfolios. These JM Financial ratings reflect a more cautious approach toward already high-performing oil marketing companies.
Oil & Gas Stocks: Earnings Outlook for Q2 FY26
JM Financial expects mixed performance among oil & gas stocks for the September quarter. RIL’s Q2 EBITDA is forecast to rise 3.6% QoQ, driven by growth in oil-to-chemicals (O2C), retail, and digital businesses, partially offset by declines in the exploration & production segment.
ONGC and Oil India’s earnings are expected to remain largely steady, while OMCs may see EBITDA fall 16–37% QoQ due to moderation in auto fuel gross margins. However, gains from robust diesel cracks, lower inventory loss, and LPG margin moderation are expected to partially support earnings. Gas companies are likely to see a mixed outlook, reflecting variations in regional supply-demand dynamics.
JM Financial Ratings: Key Takeaways for Investors
In summary, oil & gas stocks like RIL, ONGC, Oil India, GAIL, and Gujarat Gas remain top buys, while HPCL and IGL are recommended for selling. Upgrades to MGL, PLNG, and GSPL offer selective buying opportunities, and downgrades for BPCL and IOCL caution investors about limited upside.
The latest JM Financial ratings provide a clear framework for navigating the sector, balancing growth potential, risk, and valuations. Investors can use these insights to position their portfolios strategically within India’s energy and gas space.
