Oil & gas set for a re-rating: UBS

Oil marketing companies and upstream production companies are likely to re-rate in 2020 as the privatisation theme picks up and there is sustained strength in marketing business performance, said foreign brokerage UBS.

Moreover, refining margins are likely to recover due to International Maritime Organization and Bharat Stage VI emission norms, it said. Gas transmission businesses could recover with higher availability of domestic gas and liquefied natural gas, said UBS. The brokerage has upgraded GAILNSE 1.08 % India to buy and downgraded Gujarat Gas and Mahanagar Gas to sell. It has retained buy ratings on Reliance Industries, state-owned oil marketing companies and ONGC. The brokerage said RILNSE 0.40 %, BPCLNSE 0.63 %, ONGCNSE 0.93 %, and GAIL are its most favoured stocks.