RIL, ONGC, GAIL and Indian Oil shares among top bets as FY24 to be a 'blockbuster' for oil & gas sector — which stocks to buy

For the oil and gas sector — the profit after tax (PAT) or earnings before interest, taxes, depreciation, and amortisation (EBITDA) — in the fourth quarter of previous fiscal (Q4FY23) was much stronger than the preceding quarter, and this trend is likely to continue this fiscal, said analysts at ICICI Securities. EBITDA grew 22 percent and PAT rose 29 percent year-on-year in Q4FY23 as against a flat EBITDA and 17 percent on-year decline in PAT in Q3FY23.

Robust improvement in the results of Reliance Industries Limited (RIL) and the Oil Marketing Companies (OMCs) were primarily responsible for the aggregate earnings jump. This was despite muted results for the gas companies owing to a stronger base and sharp deceleration in GAIL’s earnings momentum.

"RIL's operational rebound, which commenced in Q3FY23 continued into Q4FY23 as well. EBITDA/PAT for Q4 jumped 23 percent/19 percent on-year helped by strong OTC or upstream and retail segments, ven as RJio was relatively muted," the brokerage said, maintaining a 'Add' rating on the counter due to stronger-than-estimated capex, lower return ratios and limited return of cash to shareholders.