Fundamental Analysis Report – Nifty Oil & Gas Index – 18 August 2025

1. Index Overview

The Nifty Oil & Gas Index tracks up to 15 free-float market-cap weighted companies from India’s Oil, Gas and Petroleum industry. It spans upstream (exploration & production), midstream (transport & storage), downstream (refining & marketing), and city gas distribution. Index behaviour is influenced by crude benchmarks, OPEC+ supply decisions, domestic fuel/gas pricing policies, refining margins (GRMs), and demand-seasonality.

2. Institutional Holdings & Fund Activity

FII/DII Movement (Sector-Wide – Latest Quarter):

• Foreign Institutional Investors (FII): ↑ steady allocation to upstream and OMCs amid commodity tailwinds.

• Domestic Institutional Investors (DII): ↑ flows into sector/thematic funds tracking energy/oil & gas.

Impact: Flows reflect positioning for earnings sensitivity to crude moves and GRM cycles.

3. Financial Health Snapshot (Sector Averages)

Debt-to-Equity: Moderate to High (refiners/marketing & CGDs typically higher than upstream).

Return on Equity (ROE): Mid-teens in upcycles; lower in downcycles due to margin volatility.

Return on Capital Employed (ROCE): Tracks GRMs and gas spreads; improves when crude softens.

Comment: Balance sheets of OMCs strengthened on better marketing margins; CGDs sensitive to administered gas pricing.

4. Valuation Check

Current Valuation Tone: Mixed – OMCs reasonable, CGDs premium, upstream tied to crude trajectory.

Positioning: Neutral-to-Positive for long-term allocators; tactical caution near short-term overbought signals.

Driver: OPEC+ decisions, domestic gas price notifications, and refining/marketing spreads.

5. Dividend Insight (Representative)

Dividend Yield: Typically higher for upstream & OMCs; moderate for CGDs; reinvestment among logistics/infra plays.

Payout Practice: Stable among PSUs; private names vary with capex cycles.

6. IPO Corner

Recent pipeline primarily in downstream/logistics & services adjacencies; watch filings tied to energy infra and gas distribution.

7. Sector Business Model Deep Dive

Core Segments: Upstream (ONGC/OIL), Downstream (IOC/BPCL/HPCL/Reliance), Gas Transmission (GAIL/GSPL), CGD (IGL/MGL/Gujarat Gas/ATGL), LNG (Petronet), Logistics (Aegis).

Revenue Drivers: Crude prices, GRMs, product cracks, domestic demand, regulated gas formula, LNG spreads.

Risks: OPEC supply shocks, policy changes (pricing/subsidy), FX volatility, capex overruns, ESG transition risks.

8. Key Takeaways

• Macro-sensitive index; benefits when crude eases and domestic demand is firm.

• OMC earnings levered to marketing margins; upstream levered to crude realization; CGDs to domestic gas formula & PNG/CNG spreads.

• Policy and OPEC calendars are key tactical catalysts.

9. Top & Bottom Performers in Nifty Oil & Gas Index (Illustrative Financials)

Note: Replace sample figures with latest quarterly results before publication.

Company	Revenue (₹ Cr)	Net Profit (₹ Cr)	Gross EBITDA (₹ Cr)	Net EBITDA (₹ Cr)	Operating Expenses (₹ Cr)	Performance Rank
Reliance Industries	900,000	85,000	140,000	135,000	760,000	Top Performer 1
ONGC	560,000	49,000	95,000	92,000	465,000	Top Performer 2
Indian Oil (IOC)	770,000	31,000	60,000	58,000	710,000	Top Performer 3
BPCL	450,000	20,000	36,000	34,500	415,000	Top Performer 4
HPCL	410,000	18,500	33,000	31,500	377,000	Top Performer 5
Gujarat Gas	16,000	1,300	2,400	2,300	13,300	Bottom Performer 1
Mahanagar Gas	5,800	750	1,150	1,100	4,650	Bottom Performer 2
Indraprastha Gas	11,500	1,100	2,000	1,950	9,800	Bottom Performer 3
Aegis Logistics	12,200	900	1,600	1,540	10,600	Bottom Performer 4
Petronet LNG	60,000	3,200	5,800	5,500	54,200	Bottom Performer 5

10. Market Timing Insight

With the aggregate Put–Call Ratio (PCR) at elevated readings, near-term conditions can turn tactically overbought. For Oil & Gas, event risk from OPEC meetings and domestic gas price notifications can amplify swings. Approach with staggered entries into fundamentally strong names; keep cash for corrections if PCR remains high.

11. Short-, Mid-, and Long-Term Strategies

Short-Term (1–3 months): Trade around catalysts—OPEC meetings, PPAC gas price notices, and GRM prints. Prefer liquid names (IOC/BPCL/HPCL, ONGC). Use tight stops; fade spikes if PCR stays elevated.

Mid-Term (6–12 months): Accumulate OMCs on dips when crude softens and marketing margins improve; consider CGDs after favourable gas-price resets. Add transmission/gas logistics selectively.

Long-Term (3–5 years): Core allocation to integrated & efficient players benefiting from India’s demand growth and gasification push. Monitor energy-transition capex and balance-sheet discipline.

12. Key Technical Levels – Nifty Oil & Gas Index

Time Frame	Critical Support Levels	Critical Resistance Levels
Short-Term (1–3 months)	11,200 / 10,900	11,950 / 12,200
Mid-Term (6–12 months)	10,400 / 10,000	12,800 / 13,200
Long-Term (3–5 years)	9,200 / 8,600	14,500 / 15,200

13. Upcoming Important Events (Next 3 Months)

Date	Event / Relevance
07 Sep 2025	OPEC & non-OPEC Ministerial Meeting – supply guidance; crude price impact.
01 Oct 2025	OPEC+ JMMC meeting – compliance & supply cues; volatility watch.
11 Sep 2025	OPEC Monthly Oil Market Report – demand/supply balances.
13 Oct 2025	OPEC Monthly Oil Market Report – updated outlook.
31 Aug 2025	PPAC Domestic Natural Gas Price notice (monthly) – CGD & gas spreads.
30 Sep 2025	PPAC Domestic Natural Gas Price notice (monthly) – CGD & gas spreads.

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