MRPL - Mangalore Refinery & Petrochemicals Share Price

For the financial year ending March 31, 2025, Mangalore Refinery and Petrochemicals Limited (MRPL) reported a gross refining margin (GRM) of $4.45 per barrel, with a significant jump to $6.23 per barrel in the fourth quarter (Q4) alone. The Profit Before Tax (PBT) for Q4 was INR 584 crores, marking a 25% increase from Q3. MRPL achieved a record crude throughput of 18 million tons per year, exceeding its nameplate capacity by 120%. The company's net debt to equity ratio stands at 0.99, with total debt reaching INR 13,227 crores as of March 31, 2025.

Looking ahead, MRPL aims to maintain a GRM of INR 6 to INR 6.5 per barrel for FY 2025-26, supported by projections for strong demand growth in domestic markets. The company anticipates a retail sales target of 300 thousand kiloliters (TKL) in FY 2025-26, up from 230 TKL in FY 2024-25, with plans to add 150 new retail outlets, increasing its total to approximately 330 outlets. Capex is projected at around INR 1,000 crores annually for FY 2025-26 and FY 2026-27, primarily focused on refinery upgrades and marketing activities.

Operational improvements include a goal to reduce fuel and loss by 0.4% over the next 18 to 24 months due to ongoing infrastructure projects, and increasing product flexibility with a 31% year-on-year rise in aviation turbine fuel output. The company has also diversified its crude processing, now incorporating six new types, including heavy grades from Brazil and Venezuela.

Overall, MRPL's management expressed confidence in sustaining over 100% capacity utilization and enhancing margin resilience through agile feedstock optimization and strategic marketing initiatives.

1. Question: "Could you highlight if there was any inventory gain during the quarter in your GRM?"
Answer: Yes, during the quarter, we recorded an inventory gain of around $0.42 per barrel.

2. Question: "Were there any other factors apart from inventory gains, which led to you reporting a better GRM compared to the benchmark?"
Answer: Our strategy focuses on enhancing value-added products. We prioritized maximizing economic output, particularly in aviation turbine fuel and benzene, which contributed significantly to our performance.

3. Question: "Can you give us a number of what the total throughput or sales that you are doing from your retail outlets currently?"
Answer: On an annual basis, we achieved a throughput of about 230 TKL during FY '24, '25. For FY '25, '26, our target is to cross 300 TKL.

4. Question: "Is there any capex target that you have for FY '26, '27?"
Answer: For FY '26, we are targeting a capex of around INR 1,000 crores, with a similar range expected for FY '27.

5. Question: "What infrastructure projects will reduce fuel loss?"
Answer: The power import infrastructure project aims to reduce fuel loss by around 0.4%.

6. Question: "Any updates on the green hydrogen tender?"
Answer: The tender is under evaluation. We received bids for a larger build, own, and operate project. A second smaller unit (500 tons/year) is being retendered.

7. Question: "What is the discount on Russian crude, and how is it impacting your sourcing?"
Answer: Our Russian crude sourcing costs align with the market, with discounts around 30% and approximately $1.5 to $2 relative to crude baskets.

8. Question: "What's the state of the paraxylene business?"
Answer: We currently don't produce paraxylene but increased reformate production by 30% last financial year and improved benzene production significantly.

9. Question: "What is your expected gross refining margin per barrel for FY '25, '26?"
Answer: With current market conditions, we anticipate GRMs to be around INR 6 to INR 6.5 per barrel, including retail margins.

10. Question: "In your capex of INR 1,000 crores, what portion is for maintenance?"
Answer: Nearly 50% of the capex is allocated for refinery maintenance, including shutdown capex and catalyst replacement.