Shares of Mangalore Refinery and Petrochemicals (MRPL) have given stellar returns to its buyers. The inventory has surged almost 140 % since March 2022, from round 40 to presently commerce round 95 per share.
As compared, Sensex has fallen round 4 % on this interval.
The midcap inventory touched its 52-week excessive of 95.95 on Might 23, 2022, and its 52-week low of 37.10 on February 24, 2022. It has zoomed 59 % within the final one yr and risen round 85 % in 2022 YTD.
Integrated in 1988 and primarily based in Mangalore, Mangalore Refinery and Petrochemicals Restricted manufactures and sells refined petroleum merchandise in India. It’s a subsidiary of Oil and Pure Fuel Company (ONGC). It produces and sells bitumen, furnace oil, high-speed diesel, xylol, naphtha pet coke, sulphur, and motor gasoline, in addition to polypropylene and different merchandise.
Within the March 2022 quarter (Q4FY22), the corporate’s web revenue skyrocketed over 1,000 % to 3,008 crore in opposition to a revenue of 271.86 crore within the corresponding quarter of the earlier fiscal. Its gross sales additionally jumped 82 % to 24,803 crore within the March quarter in opposition to 13,615 crore within the year-ago quarter.
In the meantime, working revenue climbed 225 % to 2941 crore for the quarter ended March 2022 in opposition to a revenue of 905 crore within the corresponding quarter of the earlier fiscal.
On an annual foundation, the agency’s web revenue got here in at 2958 crore in FY22 in opposition to a lack of 567.52 crore for the fiscal ended March 2021. Web gross sales rallied 117.50 % to 69,727 crore in FY22 versus 32,085 crore gross sales in FY21. Working revenue excluding different earnings climbed 607.65 % to 4930.59 crore in March 2022 fiscal in opposition to 696 crore revenue within the earlier fiscal.
Regardless of the stellar This fall and FY22 outcomes, brokerage home Kotak Securities have a ‘promote’ name on the inventory. The brokerage famous that the corporate’s Singapore refining margins have elevated considerably. It believes such excessive GRMs are usually not sustainable in the long term. In addition to that, any significant fall in crude oil costs would possibly lead to stock losses for refineries, usually, it added.
“We advocate SELL (earlier ADD) on the inventory with a revised worth goal of 56/share (earlier 50/share). Valued MRPL on a PE a number of of 6x FY24E earnings (unchanged), low cost to its friends contemplating its measurement, NCI and restricted retail distribution,” the brokerage mentioned.
Kotak added that it has factored in present increased GRMs and has accordingly elevated its earnings forecast for the agency. It now expects MRPL to report an EPS of 10.9 in FY23E (earlier Rs.6.8) and 9.4 in FY24E (earlier 8.3). With the commissioning of desalination plant, one of many main dangers confronted by the corporate with respect to water availability is diminished, it added.
In the meantime, the holdings of promoters of the agency remained unchanged at 88.58 % within the March 2022 quarter. Two promoters held 88.58 % stake and three.57 lakh public shareholders owned 11.72 % in This fall.
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