Q4FY18 result highlights
Key positives: Strong utilisation and improving distillate yields in FY18
Key negatives: PPU unit yet to get to full utilisation.
Impact on financials: FY19/20E EPS reduced 15/5% on lower PPU estimates. TP reduced to Rs127.
Valuations & view
MRPL is on a structural growth path, with performance of the refinery to reflect the improved configuration and higher capacity which is complimented by an improved crude sourcing slate over FY19-20E. With the improvement from the PPU unit yet to kick in fully (utilization of the PPU plant estimated @90% for FY19) and the intent to reduce F&L below 10% over F19E, we see further uptick in GRMs over FY18-20E. Coupled with the expected turn to profitability for subsidiary OMPL, profitability for MRPL should continue to expand over the next 2 years. Valuations of just 6.2x FY20E EPS/4.1x EV/EBITDA underplay the strong growth in profitability and a potential dividend yield of 4% (30% pay-out on FY19E standalone EPS implies Rs5/sh pay-out, FY18 pay-out at ~~24%). Reiterate outperformer.
Mangalore Refinery and Petrochemicals Limited is a holding company .The Company is engaged in the business of refinery and manufacturing of refined petroleum products. Its segments include Domestic Sale and Export Sale. The Company is involved in the production of liquid or gaseous fuels, illuminating oils, lubricating oils or greases or other products from crude petroleum, and manufacture of other petroleum products, such as bitumen. Its products include pet coke, liquefied petroleum gas, fuel gas, mixed xylene, high speed diesel (HSD), vacuum gas oil (VGO) and automatic transmission fluid (ATF). It operates retail outlets under the HiQ brand. It has design capacity to process approximately 15 million metric tons per annum and over two hydrocrackers producing diesel. It has over two catalytic reformers producing unleaded petrol of high octane. It offers petroleum and petrochemical products to consumers in various industries, such as mining, power, agriculture, fertilizers and paint.
IDFC Securities Ltd., a subsidiary of the Infrastructure Development Finance Company (IDFC) wherein the Government of India holds a 20% interest, is India's leading equities broker catering to most of the prominent financial institutions, both foreign and domestic investing in Indian equities. A research team of experienced and dedicated experts ensures the flow of critically investigated stock ideas and portfolio strategies for our clients. Our coverage spans across various growth sectors such as agriculture, automobiles, Consumer Goods, Technology, Healthcare, Infrastructure, Media, Power, Real Estate, Telecom, Capital Goods, Logistics, Cement amongst other sectors. Our clients value us for our strong research-led investment ideas, superior client servicing track record and exceptional execution skills.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.