Mangalore Refinery Q4 Results Review - Strong GRMs Drive Earnings: Prabhudas Lilladher

Prabhudas Lilladher Report

Mangalore Refinery and Petrochemicals Ltd. reported higher than estimated Ebitda at Rs 23.4 billion (up 98% QoQ, our estimate: Rs 16.3 billion). Profit after tax came in at Rs 11.4 billion (up 194% QoQ, our estimate: Rs 5.7 billion).

The beat on estimates was led by strong gross refining margins at $11.4/barrel of oil.

The company declared a final dividend of Rs 2/share. The stock is currently trading at nine times FY26E enterprise value/Ebitda.

Average Singapore GRM in Q1 FY25-TD is at ~$4/bbl and we believe GRMs in the long term are likely to remain weak given adequate refining capacity additions in China and India amid weak demand prospects.

Thus, we factor in a GRM of $6/6/bbl for FY25/26E. Maintain ‘Sell’ rating with target price of Rs 138 based on six times FY26 EV/Ebitda.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.