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    M R P L

    MRPLGood
    Oil, Gas & Consumable Fuels·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

    8

    • 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

    1

    • Crude Oil Price Volatility

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹20,983 Cr-8%QoQ
    2. 02EBITDA₹218 Cr
    3. 03PAT₹-272 Cr
    4. 04Gross Refining Margin3.88 $/bbl-17.4%YoY
    5. 05Crude Throughput3.52 MMT-18.5%YoY

    Segment breakdown

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

    Guidance & targets

    5
    CategoryTargetPriority
    Volume
    Q2 Throughput
    4.3 MMT
    		High
    Volume
    Retail Sales Volume
    500 TKL
    		Medium
    Margin
    Q2 GRM
    High single digit
    		Medium
    Capex
    Annual Capex
    ₹1,000 crores
    		High
    Capacity
    Retail Outlets
    300
    		Medium

    Risks & concerns

    4
    RiskSeverity

    Crude Oil Price Volatility

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

    high

    Geopolitical Sanctions (Russia)

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

    medium

    Petrochemical Margin Compression

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

    medium

    Areas of Evasion(1)

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

    Q&A highlights

    3

    “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

    2 min read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.