Motilal Oswal's research report on MRPL
MRPL’s 1QFY26 EBITDA came in significantly below our estimate, as its reported GRM of ~USD3.9/bbl was lower than our estimate of USD7.5/bbl. Adjusting for inventory gains, core GRM stood at ~USD5.9/bbl. MRPL reported a net loss of INR2.7b, as interest expenses stood above estimate and other income was below estimate. Singapore GRM remains range-bound, averaging USD4.7/bbl in Jul’25 (vs. USD5.7/bbl in 1QFY26). We have a neutral stance on refining over FY26- 1HFY28 due to strong net refinery capacity additions globally over CY25-26, demand concerns led by rising trade tensions, and possibilities of a global macroeconomic slowdown.
Outlook
MRPL currently trades at 6.3x 1yr. fwd. EV/EBITDA and 1.6x 1yr. fwd. P/B. We value the stock at 5x FY27E EBITDA of INR51.6b to arrive at our TP of INR100. Reiterate Sell.
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