MRPL (Q3 FY14)

India Infoline News Service | Mumbai |

MRPL reported a weak set of Q3 FY14 results with a loss of Rs2.5bn. This was way below our and street expectations.

CMP Rs42.8, Target Rs51, Upside 19.2%

  • MRPL reported a weak set of Q3 FY14 results with a loss of Rs2.5bn. This was way below our and street expectations.


  • Throughput was at 3.75mn tons as compared to 3.8mn tons in Q3 FY13 as the refinery underwent a shutdown. GRM was at negative US$0.58/bbl in spite of an inventory gain of Rs2.1bn and forex gain of Rs1.9bn. This underperformance was primarily due to poor power availability from the captive power plant causing increased fuel and loss expenses. Resultantly, the company reported an operating loss of Rs629mn as compared to a loss of Rs689mn in Q3 FY13.


  • Update on Phase III expansion: The last three major secondary processing units viz Delayed Coker unit/Coker Hydro Treater and Petroleum Fludic catalyst cracking unit including power plant are remaining to be commissioned.  The overall project progress as on 15th January, 2014 is 99.5%.  The work progress of Captive power plant by BHEL continues to be a major factor for delayed commissioning of units. The overall progress of Polypropylene Project has reached 93.4% as on 15th January, 2014.


  • We retain our BUY rating and 9-month price target of Rs51 as we expect the phase III expansion to commercially commence operation by Q4 FY14 resulting in marked addition of US$2.5/bbl to GRMs from next year. Commencement of Polypropylene unit in H2 FY15 will also add value.
Results table
(Rs m)
Q3 FY14
Q3 FY13
% yoy
Q2 FY14
% qoq
Throughput (mn tons)
3.75
3.81
(1.6)
3.69
1.6
GRMs (US$/bbl)
(0.58)
1.89
(130.7)
5.04
(111.5)
Net sales
188,503
180,029
4.7
187,648
0.5
Material costs
(187,562)
(177,051)
5.9
(179,250)
4.6
Personnel costs
(561)
(459)
22.1
(519)
8.0
Other overheads
(1,010)
(3,208)
(68.5)
(3,044)
(66.8)
Operating profit
(629)
(689)
-
4,835
-
OPM (%)
(0.3)
(0.4)
5 bps
2.6
(291) bps
Depreciation
(1,845)
(1,550)
19.0
(1,761)
4.8
Interest
(928)
(777)
19.4
(926)
0.2
Other income
938
84
1,011.7
310
202.4
PBT
(2,464)
(2,932)
-
2,458
-
Tax
(13)
(664)
(98.1)
(100)
(87.1)
Effective tax rate (%)
(1)
(23)
4
Adjusted PAT
(2,477)
(3,596)
-
2,358
-
Adj. PAT margin (%)
(1)
(2)
68 bps
1
(257) bps
Ann. EPS (Rs)
(6)
 

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