India’s energy needs are growing rapidly, and natural gas is becoming a key part of the solution. As the country shifts toward cleaner fuels, gas companies are gaining more attention from traders and policymakers.
With increasing demand, government support, and infrastructure development, gas stocks in India are showing strong potential. However, the future also comes with challenges like global price changes and competition from renewable energy.
This article explores the Indian gas stock market, examining its current state, government initiatives, and opportunities for traders.
Performance of the Gas Stocks in India
India’s natural gas industry is experiencing significant growth, driven by increased demand for cleaner energy sources.
For instance, Adani Total Gas and Indraprastha Gas are key players in this sector.
In Q3 FY25, Adani Total Gas reported a consolidated net profit of ₹142.38 crore, a 19.4% decline from ₹176.64 crore in the same quarter of the previous year. This decrease was primarily due to higher gas procurement costs following reduced government allocations.
Despite this, the company’s revenue from operations increased by 12.6% year-on-year to ₹1,400.88 crore, driven by a 15% rise in combined CNG and PNG sales volumes. The Adani Total Gas share price as of early May 2025 was around ₹620+.
Similarly, Indraprastha Gas faced a decline in profitability during the same period. The company posted a net profit of ₹285.82 crore, down from ₹392.07 crore in Q3 FY24. However, total gross sales value rose by 6% to ₹4,130.04 crore, supported by a 7% increase in overall sales volume. As of early May 2025, Indraprastha Gas share price was ₹190+.
Government Initiatives and Policies
Building upon the current state of India’s gas industry, the government has introduced several initiatives to support natural gas consumption.
A key objective is to increase natural gas’s share in the energy mix from 6% to 15% by 2030. To achieve this, the government is expanding the National Gas Grid Pipeline and City Gas Distribution networks, facilitating wider access to natural gas.
Significant projects like the Jagdishpur-Haldia-Bokaro-Dhamra Pipeline (Urja Ganga) aim to connect eastern regions, enhancing supply reliability.
On top of that, policies such as the Hydrocarbon Exploration and Licensing Policy (HELP) and the New Exploration Licensing Policy (NELP) have been implemented to attract private and foreign investments in exploration and production.
These policies aim to meet the projected 60% increase in natural gas demand by 2030, aligning with the goal to raise consumption from 185 million standard cubic meters per day in 2024 to over 500 million by 2030.
Trading Opportunities and Risks
Trading in India’s gas sector presents both promising opportunities and notable risks. When it comes to opportunities, here are the key ones:
The Indian government is actively promoting natural gas usage to meet rising energy demands and reduce carbon emissions. Recent legislation aims to boost oil and gas exploration, offering policy stability and incentives for traders.
Also, Urbanization and industrialization are driving increased demand for natural gas, particularly in transportation and power generation. Companies like Adani Total Gas have reported significant growth in CNG sales, reflecting this trend.
However, the sector faces significant risks too, including regulatory challenges, environmental concerns, and market volatility due to fluctuating global prices.
Additionally, increasing competition from renewable energy sources poses a long-term threat to demand. These factors can impact profitability and stock performance, requiring careful consideration for traders.
Conclusion
India’s gas sector is poised for growth, driven by government initiatives to increase natural gas’s share in the energy mix and expanding infrastructure. However, challenges like global price volatility and competition from renewables persist. Investors should carefully assess these factors when considering gas stocks.