Oil India Surges Ahead of ONGC Amid Diverging Performance

Kotak Institutional Equities has highlighted the diverging performance of state-run oil and gas companies Oil India and Oil and Natural Gas Corporation (ONGC) this year.

Oil India has significantly outperformed ONGC, with a 14% gain in share price over the past three months, compared to ONGC's 4% decline.

Kotak attributed the divergence to the preference for mid-cap stocks over large-caps and Oil India's near-term volume advantage, which is expected to deliver stronger crude oil volume growth than ONGC in FY27.

However, Kotak sees a stronger long-term case for ONGC due to its higher reserves-to-production ratios, net realisations, return on average capital employed (RoACE), and free cash flow to profit after tax.