Escalating tensions in the Middle East have pushed crude prices into the spotlight, making it the single biggest trigger for the recent sell-off in Indian equities.
Brent crude prices experienced a sharp spike and a violent reversal on Monday, skyrocketing to nearly $120 per barrel before settling under $100 amid rising tensions in West Asia, supply constraints, and fears of a prolonged conflict.
A blockade at the Strait of Hormuz, a choke point that carries about a fifth of global oil, has reignited supply shock fears, lifting crude prices and heightening risks for import-dependent economies such as India’s. Oil and related energy stocks in India have therefore come into sharp focus.
Today, we take a closer look at small cap companies in India’s oil industry. All the companies mentioned below have a market capitalisation below ₹5,000 crore.
#1 Deep Industries
The company has over three decades of experience in providing integrated solutions for oil and gas field operations, and is a one-stop solutions provider for oil & gas field operations & services.
Through its diversified portfolio, Deep Industries now covers more than 70% of the post-exploration services within the oil & gas value chain. According to its annual report for FY25, the company has served long-term contracts for drilling rig and workover services to a variety of clients, over the past 16 years, including PSUs and private E&P companies, and has an excellent track record in India.
It aims to expand its rig business into overseas markets. It has already been approved as a drilling contractor by Kuwait Oil Company for providing rigs. As of FY25, the company owns 17 drilling and workover rigs, including 11 workover rigs with capacities ranging from 30T to 150T, and 6 drilling rigs with a capacity of 1,000 HP.
On 13 February the company received a letter of award from Oil India Ltd for the supply of a 1,000 HP mobile drilling rig package in Assam and Arunachal Pradesh, further strengthening its order book. The contract is valued at ₹148 crore and will be executed over four years. Going forward, the company plans to focus on expanding its onshore drilling business.
Revenue has grown at 21.5% over the past three years, though it recorded a net loss in FY25.
The company’s three-year average return on equity (ROE) and return on capital employed (ROCE) are 5.9% and 6.7%, respectively.
#2 Hindustan Oil Exploration Company
A pioneering private company in India’s exploration and production (E&P) sector, HOEC has a diverse portfolio that includes 10 oil and gas blocks with discovered resources and one exploratory block. These assets are strategically situated across four of the seven oil producing basins in India.
The company operates several projects, including the Dirok field in Assam, PY-3 in the Cauvery Basin, and the B-80 offshore block, which form an important part of its upstream operations.
As of March 2025, it had two wholly owned subsidiaries—Hindage Oilfield Services Limited and Geopetrol International Inc.—and two wholly owned step-down subsidiaries, Geopetrol Mauritius Ltd. and Geoenpro Petroleum Limited.
During FY25, the company reported standalone production of 0.35 million barrels of oil, compared with 0.24 million the previous year. In oil equivalent terms, total production for the year stood at 1.06 million barrels of oil equivalent (mmboe), up from 0.94 mmboe in the previous year. Going forward, the company plans to expand its resource base.
Revenue has recorded a 39.3% CAGR over the past three years, while net profit has clocked a CAGR of 94.5%.
The three-year average ROE and ROCE are 17% and 19.2%, respectively.
#3 Jindal Drilling & Industries
Jindal Drilling & Industries Limited (JDIL), part of the D.P. Jindal Group Drilling Division, is a leading Indian private sector company in offshore drilling, operating since 1989. The business is organised across three operating segments: offshore drilling for oil and gas, horizontal and directional drilling, and mud logging services.
According to its Q3 FY26 presentation, the company has a fleet of offshore jack-up rigs comprising three owned rigs and three rented rigs. Currently, five offshore jack-up rigs are with ONGC in India, while one offshore jack-up rig is undergoing refurbishment in the UAE. In addition to drilling operations, the company provides mud logging and directional drilling services to oil and gas companies. Going forward, it plans to expand its offshore rig fleet. Revenue has expanded at a CAGR of 25.4% over the past three years, and net profit at a CAGR of 49.6%.
The three-year average ROE and ROCE are 8.2% and 11.5%, respectively.
#4 Antelopus Selan Energy
Established in 1985 and formerly known as Selan Exploration Technology Limited, the company is a listed private sector player engaged in oil and gas E&P since 1992. As one of the pioneers in India’s E&P sector, the company was among the first private-sector entities to obtain rights to develop discovered oilfields in Gujarat after the government of India opened the sector to private participation in 1992.
It has a portfolio of five oil and gas fields – Bakrol, Lohar, Karjisan, Elao, and Cambay – located in Gujarat. As of 31 March 2025, cumulative production from the Bakrol and Karjisan fields stood at about 3.95 mmboe and 0.44 mmboe, respectively. This accounts for about 3% and 1.5% of the estimated in-place volumes, indicating scope for future development. The company aims to expand its market presence while unlocking new avenues for growth by further developing its existing assets. Revenue has clocked a 49.5% CAGR over the past three years while net profit has grown at a CAGR of 95.4%.
The three-year average ROE and ROCE are 10.9% and 14.%, respectively.
Conclusion
According to IBEF, the country’s oil demand is projected to nearly double to around 11 million barrels per day by 2045, driven by rising energy consumption, industrial expansion, and increasing mobility. This demand is likely to create opportunities for companies operating across the oil ecosystem.
However, the sector also remains sensitive to global geopolitical developments. Escalating tensions in West Asia, particularly Iran, have heightened concerns over potential disruptions to global energy supply chains.
The Strait of Hormuz, a critical route for global oil trade, remains a key risk point, especially for major importers such as India.
Investors should always evaluate a company's fundamentals, corporate governance, and stock valuations before making an investment decision.
Happy investing!
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com