Buy MRPL; target of Rs 97: Centrum Broking

We retain BUY on MRPL, with a revised TP of Rs 97. The company reported robust GRM of USD10.0/bbl vs USD8.2/bbl in Q4FY16. However, on adjusting it for inventory gains, the core GRM was at USD5.4/bbl vs benchmark Singapore GRM of USD5.0/bbl. Core GRM could have been higher, but owing to state’s restriction on use of water led to momentary dip in throughput and lower distillate yield. Currently, MRPL has indicated a core GRM of USD5/bbl in Q2FY17 until August at a premium to benchmark Singapore GRM of USD4/bbl, and it remains resilient owing to GRM accretive Petchem operations. MRPL is a strong investment bet, with phase-III commissioned, integration of OMPL underway, positive turnaround in earnings and valuation discount to global peers, all of which cap the downside.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.