Sell MRPL; target of Rs 170: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on MRPL

MRPL delivered a substantial miss vs. our estimates in 1QFY25 due to a weak refining performance, with GRM/throughput coming in 32%/7% below our estimates. As a result, EBITDA came in 56% below our estimate. In Jul’24, Singapore GRM (SG GRM) has been only marginally up at USD4/bbl vs. USD3.5/bbl in 1QFY25 and as such, we have trimmed our 2QFY25 earnings estimates, leading to a 32% cut in our FY25E PAT numbers. We build in GRM of USD6.9/USD8.4 per bbl in FY25/FY26, leading to RoE of 11.9%/17.2%. Further, we model a throughput of 17mmt in FY25/FY26, in line with company guidance.

Outlook

We value the stock at 6x FY26E EBITDA of INR64.4b to arrive at our TP of INR170. We reiterate our SELL rating.

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