MRPL share price: Brokerage firm Elara Capital has maintained its Accumulate rating on Mangalore Refinery and Petrochemicals Limited and revised its target price upward to Rs 214. Before we explore the reasons, quickly take a look at the company’s profile.
Mangalore Refinery and Petrochemicals Limited (MRPL) is a Category 1 Schedule ‘A’ Miniratna CPSE, operating as a subsidiary of Oil and Natural Gas Corporation Limited (ONGC)under India’s Ministry of Petroleum & Natural Gas.
Located in Mangaluru, Karnataka, it operates a 15 Million Metric Tonne Per Annum (MMTPA) refinery with complex processing capabilities and an integrated Aromatic Complex.
MRPL share price: Elara Capital maintains accumulate – Here’s why
According to the brokerage, the company reflects improved earnings visibility driven by a strong refining environment. The brokerage highlights that strong gross refining margins (GRMs), estimated at around USD 13.5 per barrel, continue to act as a key catalyst for earnings momentum.
This divergence between operating performance and bottom-line growth underscores the inherent volatility in refining businesses, particularly those lacking downstream integration.
Operationally, throughput declined approximately 9 per cent year-on-year, which limited the company’s ability to fully capitalise on the favourable margin environment. The reduced utilisation levels dampened the overall benefit of strong GRMs, indicating that volume performance remains a critical variable in sustaining earnings growth.
Elara Capital also points out that MRPL’s earnings profile continues to be volatile, largely due to its dependence on global refining cycles and the absence of meaningful downstream integration.
This makes the company more sensitive to fluctuations in global crack spreads and crude price movements, reinforcing its positioning as a tactical play rather than a structural long-term compounder.
Despite these challenges, the brokerage has sharply raised its earnings per share (EPS) estimates, factoring in stronger GRM assumptions going forward. The improved outlook is driven by expectations of continued strength in global refining margins, supported by supply constraints and steady demand dynamics.
On the valuation front, Elara Capital values MRPL at approximately 6.7x forward EV/EBITDA, which it considers reasonable given the current upcycle in refining margins. The revised target price reflects both the improved earnings outlook and the favourable margin environment.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
