MRPL hits highest level since Oct 2018, rallies 34% in four trading days

Shares of Mangalore Refinery & Petrochemicals (MRPL) hit over three-year high of Rs 89.25, after they rallied 10 per cent on the BSE in Wednesday’s trade. The stock has surged 34 per cent in four trading days after the company reported strong earning for March quarter (Q4FY22). The stock of the state-owned refineries and marketing company quoted its highest level since October 2018.

MRPL is engaged in the business of refining crude oil, and is a subsidiary of Oil and Natural Gas Corporation Limited (ONGC), which holds 71.63 per cent equity shares.

For Q4FY22, MRPL reported standalone net profit of Rs 3,008 crore as against profit of Rs 268 crore in Q4FY21, supported by higher crude output and better gross refining margins. MRPL took multiple initiatives to improve the revenue from marketing margins in domestic, exports and B2B (business to business) arrangements. Given this, gross revenue from operations grew 36 per cent year on year to Rs 28,228 crore from Rs 20,793 crore in Q4FY21.

Besides that, the capacity utilization of the refinery improved in Q4 to 116.96 per cent, as compared to 107.50 per cent in Q4FY21, driven by demand recovery. The refinery successfully processed various new crudes such as Tupi Crude (APl-30.2) from Brazil, Amna Crude (APl-37 .2) from Libya, Egina Crude (APl-27.6) from Nigeria and Baobab Crude (API- 22.6, High TAN) from Ivory Coast.

Meanwhile, in the past one month, the market price of MRPL has zoomed 69 per cent, after Ministry of Corporate Affairs sanctioned amalgamation between MRPL and ONGC Mangalore Petrochemicals Limited (OMPL) along with their respective shareholders and creditors. In comparison, the S&P BSE Sensex fell 4.5 per cent during the same period.

Highlighting the rationale behind the merger, the company said, "The petrochemical project of the OMPL was conceptualised as a value addition project, utilising the naphtha and aromatic feed envisaged to be generated by the oil refinery of the MRPL, and in light of such strong existing interlink, the proposed integration of the petrochemical project of the OMPL with the oil refinery of the MRPL will create greater synergies between the business operations of both the companies and will maximise of returns to the entire group."