Top 3 Defensive Stocks to Buy during War

Periods of geopolitical uncertainty often increase investor interest in companies with stable cash flows, strong balance sheets, and businesses that can benefit from higher global energy prices. Pakistan Oilfields Limited (POL), Oil & Gas Development Company Limited (OGDC), and Pakistan Petroleum Limited (PPL) fall into this category due to their defensive characteristics, strong cash generation, and strategic importance in Pakistan’s energy sector.

Pakistan Oilfields Limited (POL)

Expected Average 2027 EPS Growth 8%

Investment Overview

Pakistan Oilfields Limited is a high-dividend energy company backed by the Attock Group. The company is recognized for its strong cash generation, conservative capital spending, and ability to maintain an attractive dividend profile. Its business model is also less exposed to domestic gas sector circular debt because more than half of its revenue comes from crude oil production.

Latest Corporate Briefing Highlights

The latest corporate briefing highlighted POL‘s strong financial position, supported by cash and financial assets of approximately PKR 112 billion. Management continues to focus on maintaining a high dividend payout through disciplined capital allocation, as historical capital expenditure has remained relatively low compared to industry peers. The company remains largely insulated from the gas sector’s circular debt due to its greater exposure to crude oil sales. At the same time, investors should continue monitoring the Tal block, which contributes around 60 percent of the company’s total production and remains a key operational asset.

Latest Quarterly And Operational Performance

Operational performance improved during 2026 through successful field development activities. Testing at the Makori Deep 03 well delivered production of 22.08 million standard cubic feet of gas per day along with 2,112 barrels of condensate per day. The Razgir 1 discovery has also been connected to the Tolanj production facility, adding production of 25.1 million standard cubic feet of gas per day and 333 barrels of condensate per day. These new production sources are expected to offset natural production declines from mature fields within the Tal block.

Why Investors May Consider POL

POL remains attractive for investors seeking dependable dividend income, strong cash reserves, and direct exposure to higher international crude oil prices. The company combines operational stability with high cash generation, making it one of the stronger defensive energy plays during periods of elevated market uncertainty.

Oil & Gas Development Company Limited (OGDC)

Expected Average 2027 EPS Growth 8.3%

OGDC is Pakistan’s largest exploration and production company with the country’s largest reserve base and significant market share in both oil and gas production. Its diversified asset portfolio and production scale continue to provide long-term earnings visibility.

Latest Corporate Briefing Highlights

Management is targeting oil production of between 48,000 and 50,000 barrels per day by December 2026. A proposal addressing gas sector circular debt has been submitted to the IMF with the objective of unlocking liquidity tied to the company’s receivables. The company continues progressing its investment in the Reko Diq copper and gold project through ongoing civil works. OGDC is also expanding internationally through its participation in Abu Dhabi Offshore Block 5, where production is expected to commence during the second half of 2028. Management is evaluating 80 wells for tight gas potential, offering an attractive premium over conventional pricing. Exploration performance also remained strong with a Reserve Replacement Ratio of 153 per cent. The company is expected to receive significant liquidity through interest settlements and arrear recoveries during 2026.

Latest Quarterly Results

For the first nine months of FY26, OGDC reported net sales of PKR 300 billion while profit after tax reached PKR 115.3 billion. Earnings per share stood at PKR 26.8. Collection efficiency strengthened considerably as the company achieved a 130 per cent collection rate during the second quarter of FY26. OGDC also became the only exploration company in the sector to reduce its overall receivables. Operational improvements pushed oil production above 40,000 barrels per day for the first time since FY19. Average daily production during the period reached 32,022 barrels of crude oil and 648 million standard cubic feet of gas.

Why Investors May Consider OGDC

OGDC offers exposure to large energy reserves, improving production trends, exploration upside, and additional long-term value through mining assets. Its scale, operational improvements, and liquidity recovery make it one of Pakistan’s strongest defensive energy companies.

Pakistan Petroleum Limited (PPL)

Expected Average 2027 EPS Growth 7.1%

Pakistan Petroleum Limited remains one of Pakistan’s leading exploration and production companies with strong cash reserves and a diversified portfolio covering hydrocarbons as well as strategic mining projects.

Latest Corporate Briefing Highlights

Management reported a cash balance of PKR 89 billion during early 2026. PPL remains one of the biggest beneficiaries of any improvement in gas sector circular debt due to its large receivable exposure from gas utilities. The Baragzai X 01 well delivered a major hydrocarbon discovery with test production of 13,470 barrels of oil per day together with 36.46 million standard cubic feet of gas per day. The company also holds an effective 8.33 per cent interest in the Reko Diq copper and gold project while maintaining exposure to the Baryte Lead Zinc project in Balochistan. International diversification continues through Abu Dhabi Offshore Block 5, while management has reduced capital intensity in the Eastern Offshore Indus C Block through a partial farm-out strategy.

Latest Quarterly And Operational Results

Collection efficiency remained strong as recovery from Sui companies reached 96 per cent during the first quarter of FY26 and 93 percent during the second quarter. Production is expected to improve as LNG cargo diversions ease pipeline congestion, allowing greater offtake from domestic fields. During the first five months of FY26, crude oil production increased by 21.9 per cent while natural gas production grew by 5.3 per cent. For the full 2026 fiscal year, net sales are projected at approximately PKR 238.3 billion with profit after tax expected to reach around PKR 82.7 billion.

Why Investors May Consider PPL

PPL combines improving operational performance, strong cash generation, exploration success, and long-term growth opportunities through mining investments. These strengths position the company as a defensive energy stock with both income and future growth potential.

Conclusion

POL, OGDC, and PPL continue to demonstrate why they are considered among Pakistan’s leading defensive energy companies. Their strong balance sheets, improving operational performance, disciplined capital management, and exposure to higher global energy prices provide investors with resilience during uncertain economic and geopolitical conditions. While each company has its own operational strengths, all three offer a combination of earnings visibility, cash flow stability, and long-term strategic growth that can strengthen a diversified investment portfolio.

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →