Prabhudas Lilladher's research report on Mangalore Refinery and Petrochemicals
Mangalore Refinery & Petrochemicals (MRPL) reported better-than-estimated results with an EBITDA of Rs14.9bn in Q2FY26 up from a loss of Rs.4.7bn in Q2FY25 and Rs.1.8bn in Q1FY26 (PLe:Rs14.5bn, cons est EBITDA: Rs13.6bn). PAT came in at Rs6.4bn, up from a loss of Rs.6.8bn/2.7bn in Q2FY25/Q1FY26 (PLe:Rs6.1bn, cons est:Rs5.4bn). The company has stopped reporting refining margins. MRPL expects GRM to be strong going forward, provided crude prices do not fluctuate. Throughput fell 3.3% YoY to 4.43mmt while it improved by 26.0% QoQ (Ple: 4.38mmt). We build in a GRM of USD7.6/7.5/bbl for Q3/Q4FY26 and 6.9/7.5/bbl for FY26/27E.
Outlook
The stock is currently trading at 16.8/12.8x FY26/27 EPS and 7.8/6.4x FY26/27E EV/EBITDA. We reiterate our rating of ‘ACCUMULATE’ on stock with a TP of Rs159 (5.5x FY27/28 EV/EBITDA) including the option value of Rs45 for its chemicals foray. The company is expected to operate at full capacity, with no major turnarounds expected in the near term leading to a continued strength in the coming quarters in GRM.
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