ICICIdirect.com's report on Mangalore Refinery and Petrochemicals
Mangalore Refinery and Petrochemicals (MRPL) reported its Q4FY15 results. The topline declined 42.8% YoY to Rs 11272.6 crore while PAT increased 9.6% YoY to Rs 1169.7 crore. Adjusting for inventory loss, the operating GRM was above our estimate
EBITDA of Rs 1257.2 crore came in higher than our estimate of Rs 942.3 crore mainly due to a better operational performance. Operational GRMs improved to $8.6/bbl vs. estimate of $7.1/bbl. Subsequently, reported GRMs improved to $6.9/bbl against $3.2/bbl YoY
Hence, PAT during the quarter was at Rs 1169.7 crore, higher than our estimates of Rs 530.7 crore
"Overall, MRPL has lower policy leverage and lowest gearing on the balance sheet among PSU refineries. With the improvement in operational performance, we expect the company to deliver profits, thus creating value for shareholders in the coming years. The company has recently increased its holding from 3% to 46% in ONGC Mangalore Petrochemicals (OMPL). OMPL is situated adjacent to MRPL phase III and can receive feedstock directly from MRPL. This acquisition is positive for the company’s diversification. We value the stock at 5.5x FY17E EV/EBITDA multiple to arrive at a target price of Rs 81. Buy the stock", says ICICIdirect.com research report.
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