Sell Mangalore Refinery and Petrochemicals; target of Rs 138: Prabhudas Lilladher

Prabhudas Lilladher's research report on Mangalore Refinery and Petrochemicals

Mangalore Refinery & Petrochemicals (MRPL) reported higher than estimated EBITDA at Rs23.4 bn (up 98% QoQ, PLe: Rs16.3 bn). PAT came in at Rs11.4 bn (up 194% QoQ, PLe: Rs5.7 bn). The beat on estimates was led by strong GRMs at US$11.4/bbl. The company declared a final dividend of Rs2/share. The stock is currently trading at 9x FY26E EV/EBITDA. Average Singapore GRM in Q1FY25-TD is at ~US$4/bbl and we believe GRMs in the long term are likely to remain weak given adequate refining capacity additions in China and India amid weak demand prospects.

Outlook

Thus, we factor in a GRM of US$6/6/bbl for FY25/26E. Maintain ‘Sell’ rating with TP of Rs 138 based on 6x FY26 EV/EBITDA.