Q3 Results Review and Expectation on Mangalore Refinery And Petrochemicals Ltd

Mangalore Refinery & Petrochemicals Limited (MRPL) was set up as a joint venture (JV) between the AV Birla Group and Hindustan Petroleum Corporation Limited (HPCL). It is now a subsidiary of Oil & Natural Gas Corporation(ONGC). The company is mainly engaged in the business of refining crude oil, petrochemical business, trading of aviation fuels and distribution of petroleum products through retail outlets and transport terminals. • Earnings volatility continues. • EBIDTA increased significantly due to higher GRMs. • MRPL hiked stake in Mangalore SEZ Limited (MSEZ). • MRPL to expand its retail presence & aims to open 1,000 retail outlets by FY27E. • We have valued the stock at a P/E (price to earnings multiple) of 6x FY27E earnings. Q3FY25 Result update: Positives: • MRPL throughput was 46.0 lakh MT (in line with our estimate of 46.0 lakh MT). • Refining margin stood significantly higher at US$6.2/bbl vs US$0.6/bbl in Q2FY25. Negatives: • MRPL reported a net profit of Rs.309 crore (vs our estimate of Rs.508 crore). • Gross revenue down 11% qoq to Rs.25,601 crore, lower than our estimate. • India’s avg. benchmark GRM is $5.4/bbl in Q4FY25 till date vs $7.6/bbl in Q3FY25.