Motilal Oswal - Mangalore Refinery Petrochemicals Ltd. (MRPL) MOSL: MRPL (Neutral)-EBITDA significantly above estimate-reported GRM at USD7.9/bbl

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Motilal Oswal

Swarnendu Bhushan

MOSL: MRPL (Neutral)-EBITDA significantly above estimate-reported GRM at USD7.9/bbl

MRPL: EBITDA significantly above estimate; reported GRM at USD7.9/bbl

(MRPL IN, Mkt Cap USD3.2b, CMP INR106, TP INR120, 14% Upside, Neutral)

MRPL's 4QFY18 EBITDA stood at INR10.4b (-33% YoY, -40% QoQ), significantly above our estimate of INR7.5b, led by higher-than-expected inventory gains and throughput. The company booked a forex loss of INR1.5b v/s forex gain of INR1.9b in 3QFY18 and INR3b in 4QFY17. PBT stood at INR8.5b (est. of INR5.2b; -35% YoY, -43% QoQ), further boosted by higher other income of INR771m (est. of INR593m; +106% YoY, +282% QoQ). Effective tax rate was 36% v/s 34% in 3QFY18 and 33% in 4QFY17. PAT was INR5.4b (-38% YoY, -44% QoQ), significantly above our estimate of INR3.5b.
Reported GRM stood at USD7.87/bbl (est. of USD5.2/bbl) v/s benchmark Singapore GRM of USD7.0/bbl, USD9.3/bbl in 3QFY18 and USD8.3/bbl in 4QFY17. We expect marginal inventory gain/loss during the quarter v/s gain of USD2.45/bbl in 3QFY18 and USD0.16/bbl in 4QFY17.
Crude throughput stood at 4.31mmt (+2% YoY, -4% QoQ), implying 115% utilization in the quarter, as against throughput of 4.5mmt (120% utilization) in 3QFY18 and 4.2mmt (113% utilization) in 4QFY17.
FY18 performance: EBITDA fell 9% YoY to INR42.8b due to lower inventory gains and slightly lower throughput in FY18. PAT declined 13% YoY to INR22.5b. Total throughput stood at 16mmt (-1.7% YoY) and core GRM at USD6.8/bbl.

16/05/2018 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 (Neutral)-EBITDA significantly above estimate-reported GRM at USD7.9/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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