MRPL Shares Surge 6.4% as YES Securities Raises Price Target Amid Q1 Losses
By ScanX News Team
Mangalore Refinery & Petroleum (MRPL) shares rose 6.4% to Rs 154.00, extending a two-day rally to 10.6%. This surge occurred despite MRPL reporting a Q1 consolidated net loss of Rs 271.97 crore, compared to a profit of Rs 73.22 crore in the same period last year. Revenue declined to Rs 20,988.03 crore from Rs 27,289.40 crore year-on-year. The weak performance was attributed to a 45-day shutdown, lower plant utilization, and limited feedstock availability. Despite these results, YES Securities maintained a 'buy' rating, raising the price target to Rs 180.00. The brokerage expects better Q2 performance due to improved refining spreads and elevated diesel cracks. MRPL's long-term growth prospects include petrochemicals expansion and retailing initiatives.
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Mangalore Refinery & Petroleum (MRPL) shares climbed 6.4% to Rs 154.00, extending a two-day rally to 10.6% amid improved investor sentiment. The surge comes despite the company reporting a consolidated net loss for the first quarter.
Q1 Financial Performance
MRPL reported a consolidated net loss of Rs 271.97 crore for Q1, a significant reversal from a profit of Rs 73.22 crore in the same period last year. The company's revenue declined to Rs 20,988.03 crore from Rs 27,289.40 crore year-on-year.
Key financial highlights for Q1:
| Metric | Q1 (Current) | Q1 (Previous Year) | Change |
|---|---|---|---|
| Revenue | 17,395.50 | 23,299.40 | -25.34% |
| Net Profit | -270.70 | 73.20 | -469.81% |
| EBITDA | 218.90 | 658.00 | -66.73% |
| EPS | -1.54 | 0.42 | -466.67% |
Factors Affecting Performance
The weak performance was attributed to several factors:
- A 45-day Phase-II shutdown extended by severe rainfall
- Lower plant utilization
- Limited feedstock availability
The gross refining margin fell to $3.88 per barrel, below the brokerage's forecast of $7.30 and the previous quarter's $6.23.
Analyst Outlook
Despite the weak Q1 results, YES Securities maintained its 'buy' rating on MRPL and raised the price target to Rs 180.00 from Rs 160.00. The brokerage values the stock at 1.9 times estimated FY27 price-to-book value.
YES Securities expects better Q2 performance due to:
- Improved refining spreads
- Elevated diesel cracks
- Geopolitical risk premiums
Russian Crude Advantage
MRPL benefits from sourcing over a third of its crude from Russia at discounted rates, which could potentially improve its margins in the coming quarters.
Long-term Growth Prospects
The company's long-term growth is expected to be driven by:
- Petrochemicals expansion
- Retailing initiatives
Currently, MRPL's net debt-to-equity ratio stands at 0.99x, indicating a balanced capital structure.
As the refining industry navigates through volatile market conditions, MRPL's strategic initiatives and potential improvements in operational efficiency will be crucial for its future performance. Investors and analysts will be closely watching the company's ability to capitalize on improved refining spreads and manage its expansion plans effectively in the coming quarters.
Historical Stock Returns for Mangalore Refinery & Petroleum
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -6.98% | -5.62% | -0.29% | +10.94% | -34.98% | +287.93% |
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