Mangalore Refinery And Petrochemicals Ltd., incorporated in the year 1988, is a Mid Cap company (having a market cap of Rs 4854.70 Crore) operating in Gas & Petroleum sector.
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 6166.88 Crore, down 2.40 % from last quarter Sales of Rs 6318.61 Crore and down 52.45 % from last year same quarter Sales of Rs 12969.91 Crore. Company reported net profit after tax of Rs 8.41 Crore in latest quarter.
MRPL’s capacity utilisation improved QoQ with increasing demand but it remains lower YoY. On the business front, MRPL plans to augment its capacity from 15 MMTPA to 18 MMTPA over the next few years. However, the last expansion project to increase complexity as well as capacity did not achieve desired results. Global product spreads have not recovered yet and will continue to affect refining margins. MRPL has further acquired balance stake of 49% for Rs 1217 crore in its subsidiary OMPL. MRPL’s previous investment in OMPL have not paid off and OMPL remains a loss making entity. OMPL reported net loss of Rs 1400 crore in FY20 and continues to be a drag at the consolidated level. We maintain SELL on the stock and value MRPL standalone refinery at Rs 18/share (0.75x FY22E BV) and OMPL investment at Rs 4/share (0.25x FY22E BV) to arrive at a target price of Rs 22.
Promoters held 88.6 per cent stake in the company as of June 30, 2020, while FIIs held 0.6 per cent, DIIs 4 per cent and public and others 6.8 per cent.
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