MRPL falls 6% despite Q2 profit nearly tripling

(MRPL) fell 6.55% to ₹173.13 on the NSE on October 15, despite reporting a 195% year-on-year jump in Q2 FY27 standalone net profit to ₹1,880.89 crore. The stock had closed at ₹185.26 on Wednesday, ahead of the results released late that night. Revenue from operations rose to ₹35,590.40 crore from ₹25,953.34 crore. EBITDA more than doubled to ₹3,210 crore, and the operating margin expanded to 8.82% from 4.93%. The board declared an interim dividend of ₹3 per share. MRPL also received its first international credit rating, BBB- with a stable outlook from Fitch, at par with India's sovereign rating. This looks like a case of buying the rumour and selling the news. The stock had already rallied 5.33% in the session before the results, so much of the good news was priced in. Investors appear to be booking profits rather than chasing the headline growth. The quality of earnings also matters. Part of the profit jump came from a lower effective tax rate, which fell to 25.17% from 34.94% after the company moved to the new tax regime. Throughput actually fell to 4.18 million tonnes from 4.43 million tonnes a year ago, so the gain came from better margins, not higher volumes. Refining margins can change quickly with crude prices. Investors should watch gross refining margins, crude oil prices, throughput recovery in Q3, and progress on the new petrochemicals marketing joint venture with ONGC and OPaL. The key question is whether MRPL can sustain these margins once the one-time tax benefit and favourable refining spreads normalise. Disclosure: I do not hold any position in Mangalore Refinery and Petrochemicals Limited. This post is for informational purposes only and is not investment advice.