September 24, 2026: Shares of state-run oil and gas companies Oil India and Oil and Natural Gas Corporation (ONGC) have taken sharply different paths this year, with ONGC significantly underperforming Oil India despite both companies benefiting from higher global crude and gas prices.

In a September 21 report, Kotak Institutional Equities said the divergence is striking, arguing that the valuation premium commanded by Oil India over ONGC appears difficult to justify.
Why Oil India pulled ahead Of ONGC.

Kotak attributed Oil India's sharp outperformance over the past three months partly to the broader preference for mid-cap stocks over large-caps. The brokerage noted that mid-cap funds continued to attract strong inflows, while large-cap funds saw comparatively low mobilisation during the period.

Data cited by Kotak showed dedicated mid-cap and small-cap mutual funds accounting for 32% and 42%, respectively, of equity-oriented fund flows in the eight months through August and during June-August 2026. The weighted-average net asset value of mid-cap funds also crossed its September 2024 peak in May 2026.

Kotak noted that ONGC has underperformed Oil India by 15 percentage points since the end of February 2026 and by 14 percentage points since the end of June in terms of share price returns.

Oil India's stock was down just 1% from February 28, while ONGC was down 16% over the same period, according to the brokerage. Over the past three months, Oil India shares have gained 14%, in comparison to ONGC's 4% decline.

Kotak expects Oil India to deliver stronger crude oil volume growth than ONGC in FY27. Its estimates show Oil India's total sales volumes rising from 5.7 million tonnes of oil equivalent (mn toe) in FY26 to 6.5 mn toe in FY27, implying a growth of 13.8%.

For ONGC, total sales volumes are estimated to increase from 41 mn toe to 42 mn toe over the same period, a 2.4% increase.

(Source: CNBC)