MRPL Shares Drop 7 Percent Despite Strong Second Quarter Profit Jump

Mangalore Refinery and Petrochemicals shares fell over seven percent in Thursday's trading session even though the company posted strong financial results for the September quarter of fiscal year 2027.

Financial Results

The company opened at 189.60 rupees per share on the National Stock Exchange and touched a low of 171.20 rupees on 15 October, compared to its previous close of 185.26 rupees on Wednesday. Mangalore Refinery and Petrochemicals Ltd, a subsidiary of Oil and Natural Gas Corporation, reported a nearly threefold year-on-year jump in standalone net profit to 1,881 crore rupees for the second quarter, up from 639 crore rupees in the same period last year. Revenue from operations grew 37.1 percent to 35,590 crore rupees, while profit before tax rose to 2,519 crore rupees from 975 crore rupees. Earnings before interest, depreciation, tax, and amortisation more than doubled to 3,210 crore rupees.

Dividends And Operations

For the first half of the fiscal year, standalone net profit surged to 2,796 crore rupees and revenue climbed to 77,199 crore rupees. The company board approved a first interim dividend of 3 rupees per equity share, which is 30 percent of the face value. MRPL also received its first-ever international credit rating from Fitch Ratings, securing a 'BBB-' rating with a stable outlook. During the quarter, the firm finalised agreements to hire storage tanks for aviation turbine fuel in Goa and motor spirit and high-speed diesel in Kochi, while starting product loading at terminals in Mangaluru, Hindupur, and Ennore.

Analyst Views

Brokerage firm PL Capital maintained a hold rating on the stock with a revised target price of 180 rupees per share, raising its fiscal year 2027 gross refining margin assumption to 11.3 US dollars per barrel. Mahesh M Ojha, VP Research and Business Development at Kantilal Chhaganlal Securities, suggested that traders could consider buying the stock in the 165 to 168 rupee range with a stop-loss at 154 rupees, aiming for target prices of 178 rupees and 188 rupees.

Context

Stock prices in the energy sector often fluctuate based on quarterly earnings and broader market conditions despite positive financial reports. Company dividends and credit ratings serve as key indicators of financial health for public sector undertakings in India.