Prabhudas Lilladher's research report on Mangalore Refinery and Petrochemicals
Mangalore Refinery & Petrochemicals (MRPL) had a partial shutdown in the quarter due to which, throughput declined from 4.6mmt in Q4FY25 to 3.5mmt. Decline in oil prices resulted in inventory loss of USD2/bbl, worsening the reported GRM from USD6.23/bbl in Q4FY25 to USD3.9/bbl. Higher shutdown related costs further worsened EBITDA to Rs1.8bn (Ple Rs11.8bn, BBGe Rs10.9bn, -70% YoY, -84% QoQ). Poor EBITDA resulted in PAT loss of Rs2.7bn in the quarter. We build in a core GRM of USD7.1/7.5/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.
Outlook
We upgrade our rating from ‘HOLD’ to ‘ACCUMULATE’ rating on the stock with a TP of Rs152 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 ofRs45 for its chemicals foray.
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