Motilal Oswal - Mangalore Refinery Petrochemicals Ltd. (MRPL) MOSL: MRPL (Upgrade to Neutral)-EBITDA significantly above estimate-core GRM at USD6.8/bbl

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Motilal Oswal

Swarnendu Bhushan

MOSL: MRPL (Upgrade to Neutral)-EBITDA significantly above estimate-core GRM at USD6.8/bbl

MRPL: EBITDA significantly above estimate; core GRM at USD6.8/bbl

(MRPL IN, Mkt Cap USD3.2b, CMP INR117, TP INR114, 3% Downside, Upgrade to Neutral)

MRPL’s 3QFY18 EBITDA was INR17.5b (+52% YoY, +93% QoQ), significantly above our estimate of INR11.5b, led by higher than expected inventory gains and throughput. The company booked a forex gain of INR1.9b v/s forex loss of INR670m in 2QFY18 and INR1.6b in 3QFY17. Interest cost was INR1.2b (-17% YoY, +10% QoQ; our estimate: INR1.3b), depreciation was INR1.7b (+1% YoY, +1% QoQ; our estimate: INR1.9b) and other income was INR202m (-68% YoY, -76% QoQ; our estimate: INR573m). Effective tax rate was 34% v/s 31% in 2QFY18 and 37% in 3QFY17. PAT was INR9.7b (+72% YoY, 103% QoQ), significantly beating our estimate of INR5.9b.
Core GRM at USD6.8/bbl: Core GRM stood at USD6.8/bbl v/s benchmark Singapore GRM of USD7.3/bbl, USD5.3/bbl in 2QFY18 and USD5.1/bbl in 3QFY17. Inventory gain stood at USD2.45/bbl in 3QFY18 v/s a gain of USD2.7/bbl in 2QFY18 and USD2.3/bbl in 3QFY17.
Crude throughput stood at 4.5mmt (+3% YoY, +27% QoQ), implying 120% utilization in the quarter, as against throughput of 3.53mmt (94% utilization) in 2QFY18 and 4.35mmt (116% utilization) in 3QFY17.

05/02/2018 8 EN

Underlying

Mangalore Refinery & Petrochemicals Ltd.

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.

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INE103A01014 National Stock Exchange of India India

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Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Swarnendu Bhushan

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MOSL: MRPL (Upgrade to Neutral)-EBITDA significantly above estimate-core GRM at USD6.8/bbl

MOSL: MRPL (Neutral)-Strong 1QFY23, but consistency is key

With a more favourable environment, MANGALORE REFINERY improves to Positive

MOSL: MRPL (Neutral)-Better than expected core GRM, but concerns remain

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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