MRPL Shares Upgraded To 'Add' By PL Capital Post Q1 Results — Check Target Price
MRPL reported a core GRM of $5.9/bbl vs $3.8/bbl in Q1 FY25 and $5.8/bbl in Q4 FY25. However, inventory loss of $2/bbl resulted in reported GRM of $3.9/bbl vs $4.7/bbl in Q1 FY25 and $6.2/bbl in Q4 FY25.
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PL Capital Report
Mangalore Refinery and Petrochemicals Ltd. had a partial shutdown in the quarter due to which, throughput declined from 4.6 million metric tonne in Q4 FY25 to 3.5 mmt. Decline in oil prices resulted in inventory loss of $2/bbl, worsening the reported gross refining margin from $6.23/bbl in Q4 FY25 to $3.9/bbl. Higher shutdown related costs further worsened Ebitda to Rs 1.8 billion (our estimate Rs 11.8 billion, Bloomberg estimate: Rs 10.9 billion, -70% YoY, -84% QoQ).
Poor Ebitda resulted in PAT loss of Rs 2.7 billion in the quarter. We build in a core GRM of $7.1/7.5/bbl for FY26/27E. The stock is currently trading at 14.3/10.9x FY26/27 EPS and 7.5/5.9x FY26/27E EV/Ebitda.
We upgrade our rating from ‘Hold' to ‘Accumulate' rating on the stock with a target price of Rs 152 due to expected strength in the coming quarter in GRM as well as inventory gains.
Our target price is based on 5x FY27 EV/Ebitda and adding the option value of Rs 45 for its chemicals foray.
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