MRPL Q3 Results Review — PL Capital Downgrades The Stock To 'Hold'; Here's Why

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PL Capital Report

Mangalore Refinery and Petrochemicals Ltd. reported better-than-estimated results with an Ebitda of Rs 10.3 billion in Q3 FY25 (versus Ebitda loss of Rs 4.7 billion in Q2, our estimate: Rs 4.1 billion, Bloomberg estimate: Rs 8.1 billion). PAT came in at Rs 3 billion (versus net loss of Rs 6.8 billion in Q2; our estimate Net Loss: Rs 1.1 billion, BBGe PAT: Rs 1.7 billion).

Reported gross refining margin stood at $6.2/barrel of oil with an inventory gain of $0.03/bbl. Throughput came in flat QoQ at 4.6 mmt. Average Singapore GRM in Q4 FY25-TD has softened to ~$3/bbl amid decline in product cracks.

While near-term weakness persists, we believe GRMs will rebound to $5-7/bbl in the long term. Accordingly, we build in a GRM of $4.1/7.5/7.5/bbl for FY25/26/27E.

The stock is currently trading at 10.9x/10.9x FY26/27 EPS and 6.1x/5.7x FY26/27E EV/Ebitda.

Factoring in the near-term weakness we downgrade our rating from ‘Accumulate’ to ‘Hold’ with a target price of Rs 137 based on five times FY27 EV/Ebitda and adding the option value of Rs 45 to its chemicals foray.

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