M R P L — Q1 FY26 earnings call

Call held 21 Jul 2025

Management summary

Q1 FY26 was an operationally challenging quarter for MRPL due to a major planned maintenance shutdown and significant inventory losses from falling crude prices. Despite the reported loss, the refinery achieved record processing in April and has now returned to full capacity. Management is optimistic about a sharp rebound in the coming quarters, supported by higher throughput and improving cracks.

Highlights

  • Revenue from operations stood at ₹20,983 crores, impacted by lower throughput and a 20% drop in benchmark crude prices YoY.

  • Reported a PAT loss of ₹272 crores, primarily attributed to a planned plant shutdown and inventory valuation losses.

  • Gross Refining Margin (GRM) averaged $3.88 per barrel, significantly lower than $6.23 in the previous quarter.

  • Crude throughput was 3.52 MMT, reduced by 0.8 MMT YoY due to the planned Phase-II shutdown.

  • Distillate yield remained healthy at 80.97%, consistent with previous quarters.

  • Retail marketing segment contributed ₹60 crores in margin with a sales volume of 68,000 KL for the quarter.

  • Gross debt stood at ₹13,608 crores with a debt-equity ratio of 1.08x.

  • Management expects a strong recovery in Q2 FY26 with throughput targets exceeding 4.3 MMT.

Concerns

  • Crude Oil Price Volatility

Key financials

  1. Revenue ₹20,983 Cr -8%QoQ
  2. EBITDA ₹218 Cr
  3. PAT ₹-272 Cr
  4. Gross Refining Margin 3.88 $/bbl -17.4%YoY
  5. Crude Throughput 3.52 MMT -18.5%YoY
  6. Gross Debt ₹13,608 Cr

What they filed

Q1 FY27: revenue up 120.4%, net profit up 436.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue24,968 21,871 24,596 17,356 22,649 −9%24,712 +13%23,950 −3%38,254 +120%
EBITDA-474 1,031 1,130 180 1,489 +414%2,785 +170%1,783 +58%1,318 +632%
Net profit-682 304 363 -272 639 +194%1,445 +375%119 −67%915 +436%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Retail Marketing
    ₹60 Cr Margin Contribution68,000 KL Sales Volume170 Retail Outlets
  • Petrochemicals
    0.5 $/bbl PX Complex Margin100% Polypropylene Capacity Utilization

Guidance & targets

Volume

  • Q2 Throughput Volume · Q2 FY26 · High confidence 4.3 MMT
    we expect the throughput in Q2 to be above 4.3 MMT

    — Mr. M. Shyamprasad Kamath, MD

  • Retail Sales Volume Volume · FY27 · Medium confidence 500 TKL
    So we target to achieve about 500 TKL.

    — Mr. M. Shyamprasad Kamath, MD

Margin

  • Q2 GRM Margin · Q2 FY26 · Medium confidence High single digit
    we are targeting GRMs in the high single digit range for Q2

    — Mr. M. Shyamprasad Kamath, MD

Capex

  • Annual Capex Capex · FY26 · High confidence ₹1,000 crores
    Total annual CapEx is expected to be around Rs.1,000 crores, including the shutdown expenses

    — Mr. M. Shyamprasad Kamath, MD

Capacity

  • Retail Outlets Capacity · FY26 · Medium confidence 300
    our target is to go closer to 300. But yes, our target immediate short term is to achieve another 100 in this financial year.

    — Mr. M. Shyamprasad Kamath, MD

Risks & concerns

  • Crude Oil Price Volatility

    high

    Crude price shocks significantly impacted the bottom line through inventory valuation losses in Q1.

    Management acknowledged

  • Geopolitical Sanctions (Russia)

    medium

    Recent EU sanctions on Russian crude are being assessed for potential impacts on fleet and price caps.

    Both acknowledged

  • Petrochemical Margin Compression

    medium

    The paraxylene, PTA, and polyester chain is currently under pressure globally, forcing a shift in operating modes.

    Analyst acknowledged

Areas of evasion (1)

  • Specific capacity numbers for global refinery closures were not immediately available.

Q&A highlights

3 direct
Inventory Loss and Shutdown Impact on GRM Direct
The GRM, if the shutdown was not there, we would have been somewhere around $8. So, the impact of the inventory loss is around $2. And with no shutdown, it would have been another $2.

Quantifies the transient nature of the poor Q1 margins, suggesting a normalized GRM of $8/bbl.

Asked by Ramesh, Nirmal Bang Equities

Russian Crude Discounts and Sanctions Direct
Which would be like $2.5 to $3 range delivered for India? ... You can say plus minus something there.

Confirms that MRPL is still realizing significant discounts on Russian crude, in line with national averages.

Asked by Kishan Mundhra, DAM Capital

Petrochemical Strategy (Reformate vs Paraxylene) Direct
we have shut down the paraxylene part of the complex. And what we do is, we operate it to a phase where we make this reformate... we are extracting some benzene also and adding value to it.

Explains the tactical shift to reformate mode to protect margins while the PX-PTA chain is under global pressure.

Asked by Pratyush Kamal, InCred Equities

2 min read 5 chapters

Detailed narrative

Operational Impact of Phase-II Shutdown

The quarter was defined by a planned Phase-II shutdown which reduced crude throughput by 0.8 MMT compared to the previous year. Despite this, the refinery demonstrated its inherent capacity by setting a record processing of 1.51 MMT in April alone. All major units returned to full service in late June, positioning the company for a high-utilization run in the second quarter.

Financial Performance and Margin Compression

Revenue contracted to ₹20,983 crores due to lower volumes and a 20% YoY fall in benchmark crude prices. The reported PAT loss of ₹272 crores was driven by the shutdown and a $2/bbl inventory loss. Management noted that without these transient effects, the GRM would have been approximately $8/bbl instead of the reported $3.88/bbl.

Strategic Shift in Petrochemical Operations

Due to weak global paraxylene (PX) margins, MRPL has shifted its aromatic complex to 'reformate mode.' This allows the company to produce blend stocks for gasoline or MS blending rather than finishing PX. This tactical move contributed approximately $0.5/bbl to the overall margin, while the polypropylene plant continued to run at 100% capacity with stable margins.

Aggressive Retail Marketing Expansion

MRPL is rapidly scaling its retail footprint, having commissioned 170 outlets to date with a target to reach 300 by the end of the fiscal year. Retail sales volume reached 68,000 KL in Q1, contributing ₹60 crores in margin. The company has set an ambitious target to reach 500 TKL in retail sales volume by FY27, focusing on the southern and western markets.

Outlook and Debt Management

Management expects Q2 throughput to exceed 4.3 MMT with GRMs trending in the high single digits. Gross debt stands at ₹13,608 crores, and the company is focused on reducing this through improved earnings and selective capex spending. The annual capex is capped at ₹1,000 crores, with a significant portion already spent on the Q1 shutdown activities.

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