Adani Total Gas rallies 40% amid West Asia crisis; what's fueling gains?

Shares of Adani Total Gas have emerged as the top performer in the Nifty Oil & Gas pack, surging nearly 40 per cent since the onset of the West Asia conflict, even as the sectoral index declined around 9 per cent amid rising crude oil prices and geopolitical uncertainty. 

The conflict has fuelled concerns over potential supply disruptions through the Strait of Hormuz, pushing crude oil prices higher and dampening investor sentiment toward the sector. 

Adani Total Gas has rallied from ₹512 on February 27, 2026, to ₹717.6 on June 3, 2026, making it the best-performing constituent of the Nifty Oil & Gas index during a period marked by heightened volatility across energy counters, according to ACE Equities data. 

 

In contrast, the Nifty Oil & Gas index has fallen nearly 9 per cent during the period, weighed down by losses in heavyweight stocks and concerns over the impact of elevated crude prices on downstream companies.

Policy support, price hikes aid rally

Analysts attributed the sharp outperformance in Adani Total Gas to favourable government policies, strategic price hikes, and improving sentiment around the broader Adani Group. 

“Adani Total Gas Ltd's outperformance is driven by government policies that secured its domestic gas supplies amid Middle East tensions, strategic price hikes, and a broader resurgence in Adani Group market sentiment following the resolution of key regulatory issues,” said market expert Avinash Gorakshakar. 

According to him, the company also implemented multiple strategic retail and industrial gas price hikes to offset costlier alternative energy sources. 

“These series of CNG hikes significantly improved investor expectations,” he added. 

Gorakshakar believes upstream producers and integrated energy majors are better positioned to outperform in the current environment as they directly benefit from higher crude realisations and improved margins. 

“In contrast, downstream entities like OMCs, refineries and marketing companies will suffer squeezed margins due to delayed retail price adjustments and rising input costs,” said Gorakshakar.

Downstream stocks remain under pressure

Besides Adani Total Gas, only a handful of index constituents posted positive returns. Chennai Petroleum Corporation gained 23.7 per cent, while Aegis Logistics and Oil India advanced 10.5 per cent and 1.5 per cent, respectively. 

Among large-cap stocks, Reliance Industries declined 6 per cent, while ONGC and GAIL slipped 4 per cent and 3 per cent, respectively. 

Several other sector heavyweights also remained under pressure. Indian Oil Corporation fell 23.2 per cent, Bharat Petroleum Corporation declined nearly 27 per cent, while Hindustan Petroleum Corporation lost 24 per cent during the period. 

Meanwhile, Mahanagar Gas, Petronet LNG, Aegis Vopak Terminals, Indraprastha Gas, and Castrol India declined up to 16 per cent.

Analysts favour pure-play refiners

Echoing a similar view, Dhaval Popat, analyst (Energy) at Choice Institutional Equities, said elevated crude prices due to prolonged West Asia tensions are likely to benefit upstream companies through higher realisations. 

He, however, believes select downstream refiners could also outperform. 

“Within the downstream segment, we believe complex, export-oriented refiners could also outperform. The post-2022 loss of Russian diesel supplies to Europe has structurally tightened global distillate markets, resulting in diesel cracks remaining resilient during periods of elevated crude prices,” said Popat. 

According to him, refiners with high complexity and strong diesel yields are better positioned to capture these margins. 

“As a result of this, we prefer pure-play refiners,” he said. 

Popat added that assuming a GRM cap of around $15 per barrel for Indian refiners, and if incremental government intervention remains broadly in line with the April-May-June measures, pure-play refiners could see a strong year-on-year uplift in revenues and EBITDA during H1FY27, aided by a favourable base. 

Choice Institutional Equities has a ‘Buy’ rating on MRPL and CPCL, with target prices of ₹215 per share and ₹1,265 per share, respectively.  =================================

(Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.)