Budget 2026: Raja Venkatraman's Top Oil & Gas Stock Picks for Indian Investors

Budget 2026: Raja Venkatraman's Top Oil & Gas Stock Picks for Indian Investors

As India prepares for Budget 2026, market expert Raja Venkatraman, co-founder of NeoTrader, has shared his exclusive recommendations for oil and gas stocks that investors should consider. With India being the world's third-largest oil consumer and fourth-largest refiner, the government's twin strategy of boosting domestic hydrocarbon output while accelerating diversification into gas and cleaner fuels is expected to shape key policy announcements.

India's Energy Landscape Ahead of Budget 2026

The Indian energy sector is at a critical juncture, with pre-Budget consultations highlighting several industry priorities. Key expectations include:

• Enhanced exploration incentives to raise domestic crude output toward 100 million tonnes
• Increased gas production targets of 50 billion cubic metres
• Rationalization of duties and taxes to moderate retail fuel prices
• Stronger policy support for ethanol blending, compressed biogas, and green hydrogen initiatives

Parallel to these developments, the sugar and bio-energy industry has proposed repositioning itself as a "bio-energy hub," calling for a more robust National Mission on Green Hydrogen with incentives for green bio-hydrogen pathways using agro-based feedstock.

Indian Oil Corporation: The Refining Giant's Strategic Position

Indian Oil Corporation (IOC), currently trading at ₹158.82, has demonstrated remarkable resilience in FY26 despite volatile crude prices and refining margins. The company's strong Q2 results have driven significant stock gains, with the share price rising from approximately ₹128 to ₹158 between January 2025 and January 2026—a gain exceeding 23%.

IOC's strategic moves include:

1. Diversified crude sourcing through increased purchases from Middle Eastern spot markets
2. Expanded procurement of Basrah Medium from Iraq and Murban crude from the United Arab Emirates
3. Supply chain flexibility that reinforces India's diplomatic positioning in global energy markets

Technical analysis suggests that if IOC maintains support around ₹147 post-Budget, the stock could potentially move toward ₹172–₹207 targets. The company's scale and refining capacity make its decisions particularly influential, setting the tone for other refiners across the country.

Key Budget expectations for IOC include:

• Review of OID cess on domestic crude
• Lower GST rates on fuels and LPG
• Higher subsidies for under-recoveries exceeding ₹30,000 crore in 9M FY25

Oil and Natural Gas Corporation: Upstream Strength Amid Challenges

Oil and Natural Gas Corporation (ONGC), trading at ₹242.37, remains India's largest upstream player despite facing pressures from low crude prices and forex losses. The stock has traded in a relatively tight range between ₹260 and ₹242 over the past year, averaging about 7% returns amid production challenges and commodity volatility.

ONGC's strategic priorities include:

1. Accelerated exploration efforts to achieve India's 100 MMT crude production ambition
2. Review of OID cess on older pre-NELP blocks to reduce production costs
3. Higher capital expenditure for strengthening energy self-reliance
4. Recovery in Mozambique gas projects and partnerships with BP

Technical indicators suggest that once ONGC clears resistance at ₹252, the stock could experience strong upward momentum, potentially challenging its all-time highs around ₹340 within the next year. The company's focus on exploration and reduced tax burdens positions it favorably compared to downstream oil marketing companies that face greater excise duty risks.

Broader Sector Outlook and Investment Considerations

The oil and gas sector continues to command investor attention despite crude oil's relatively subdued performance compared to precious and base metals in 2025. As global debates intensify over oil flow control, the focus has shifted toward reviving momentum in this critical sector.

Prominent companies across the oil, gas, and bio-energy value chains that investors should monitor include:

• Oil India Ltd for domestic exploration exposure
• Reliance Industries Ltd across refining, petrochemicals, and new energy segments
• Bharat Petroleum and Hindustan Petroleum among oil marketing companies
• GAIL (India) Ltd and Petronet LNG in gas transmission and regasification
• Praj Industries for biofuels and bio-energy engineering

These companies sit at the center of themes spanning domestic exploration, refining, gas infrastructure, ethanol, and advanced biofuels, making them particularly sensitive to Budget signals on duties, pricing frameworks, and incentive structures.

Raja Venkatraman is co-founder of NeoTrader with SEBI registration number INH000016223. Investments in securities are subject to market risks. Investors should read all related documents carefully before investing. Registration granted by SEBI and certification from NISM do not guarantee intermediary performance or provide assurance of returns. The views and recommendations expressed are those of the individual analyst and do not represent Mint's views. Investors should consult certified experts before making investment decisions.