MRPL - Enroute Continuous Growth, Innovation: Yes Securities

Yes Securities Report

High gross refining margin sensitivity: a $1/barrel of oil change in GRM changes Mangalore Refinery and Petrochemicals Ltd.'s Ebitda by Rs 9.8 billion. Book value/share for FY25e/26E: Rs 89/102; debt: equity at 0.6/0.4 times FY25 E/26E versus 1.7 times in FY23.

At current market price, stock trades at 7.3 times/8.1 times FY25e/26e enterprise value/Ebitda and 2.1 times/1.9 times P/BV.

We upgrade to a Buy rating (from Add) at an unchanged target price of Rs 257 following a recent stock price correction.

Established in 1988, MRPL has transformed over the years, from a modest joint venture to a majority-owned subsidiary of Oil and Natural Gas Corporation Ltd. (earlier Birla Group).

It is India’s largest singlelocation PSU refinery, a credible play on refining and petchem in South India of 15 mtpa capacity, versatile design, complex secondary processing units, and high flexibility to process crudes of various APIs.

It produces the whole range of petroleum products such as Naphtha, LPG, motor spirits, High-speed diesel, Kerosene, Aviation Turbine Fuel, Sulphur, Xylene, Bitumen along with Pet coke and Polypropylene.

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