M R P L — Q4 FY25 earnings call

Call held 28 Apr 2025

Management summary

MRPL delivered a strong Q4 performance characterized by record-breaking operational throughput and a significant recovery in refining margins. Management is pivoting toward a more aggressive retail expansion strategy and higher-value petrochemical yields to de-risk from volatile global benchmark margins. Despite global headwinds, the company maintained high capacity utilization and is investing in infrastructure to further reduce fuel and loss costs.

Highlights

  • Gross Refining Margin (GRM) for Q4 stood at $6.23 per barrel, with a full-year GRM of $4.45 per barrel.

  • Profit Before Tax (PBT) for Q4 reached ₹584 crores, representing a 25% sequential growth over Q3.

  • Record crude throughput of 18 million tons per year, achieving 120% of nameplate capacity utilization.

  • Distillate yield improved to 83% in Q4, driven by a focus on value-added products like ATF (+31% YoY) and Benzene (+65% YoY).

  • Total debt as of March 31, 2025, was ₹13,227 crores with a net debt-to-equity ratio of 0.99.

  • Polypropylene sales hit an all-time high of 473,000 metric tons during the financial year.

  • Retail network expanded to 167 outlets, with a target to add 150 more in the coming year.

  • Inventory gain of approximately $0.42 per barrel contributed to the Q4 GRM performance.

Key financials

  1. Profit Before Tax ₹584 Cr +25%QoQ
  2. Gross Refining Margin 6.23 $/bbl
  3. Crude Throughput 18 MMTPA
  4. Total Debt ₹13,227 Cr
  5. Net Debt to Equity 0.99
  6. Distillate Yield 83%

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.

Guidance & targets

Capex

  • Annual Capital Expenditure Capex · FY26 · High confidence ₹1,000 crores
    FY'26, our target is going to be in the range of around INR1,000 crores. And FY'27 also, it could be in a similar range.

    — M.S. Kamath, Managing Director

Capacity

  • Retail Outlet Additions Capacity · FY26 · High confidence 150
    we have set a target of 150 retail outlets addition in this year.

    — M.S. Kamath, Managing Director

Volume

  • Retail Sales Volume Volume · FY26 · Medium confidence 300 TKL

    From 230 TKL today

    FY '25, '26, we are targeting -- our target is to cross 300 TKL.

    — M.S. Kamath, Managing Director

Margin

  • Integrated Gross Refining Margin Margin · FY26 · Medium confidence ₹6 to ₹6.5
    For '25, '26 with the kind of current cracks which are going on and the crude prices which are there we are expecting the GRMs to be in the range of around INR6 to INR6.5

    — M.S. Kamath, Managing Director

Efficiency

  • Fuel and Loss Reduction Efficiency · next 18 to 24 months · Medium confidence 0.3% to 0.4%
    we are expecting that this will be further coming down to by around another 0.3% or 0.4% in the next 18 to 24 months.

    — M.S. Kamath, Managing Director

Risks & concerns

  • Domestic Supply Competition

    medium

    The commissioning of HPCL Rajasthan (HRRL) and IOCL expansions could increase domestic product supply and pressure realizations.

    Analyst acknowledged

  • Crude Feedstock Availability

    medium

    Barmer crude output has declined, now representing only 3-4% of the basket, forcing a shift to other grades.

    Both acknowledged

  • Global Refining Overcapacity

    low

    Analyst raised concerns about global net refining capacity additions in 2025; management believes closures in Europe/Australia will balance the market.

    Analyst downplayed

Areas of evasion (2)

  • Segmental EBITDA split between marketing and refining was not provided.
  • Specific IRR targets for retail outlets were not disclosed beyond 'undergoing economic analysis'.

Q&A highlights

2 direct
Inventory Gains and Benchmark Comparison Direct
During the quarter, there was an inventory grain of around $0.42 per barrel.

Clarifies that a portion of the GRM outperformance against Singapore benchmarks was due to inventory timing rather than pure operational cracks.

Asked by Kishan Mundhra

Potential Merger with HPCL Direct
See, we as MRPL, first of all, we are not aware of any such developments. And even if there are any such developments, it is the 2 promoters who have to ultimately take the call.

Management explicitly distances itself from ongoing market rumors regarding a merger with HPCL, placing the onus on ONGC and the government.

Asked by S. Ramesh

Crude Sourcing and Russian Discounts Partial
We can say almost one-third came from the Middle East and Domestic was also in the range of around -- we can say almost one-third.

Confirms MRPL's significant reliance on Russian crude (implied as the remaining third) and that discounts have narrowed to industry-standard levels.

Asked by Sabli Hazarika

2 min read 5 chapters

Detailed narrative

Operational Excellence and Record Throughput

MRPL achieved a landmark crude throughput of 18 million tons per year, operating at 120% of its nameplate capacity. This operational efficiency was supported by processing six new crude grades, including heavy grades from Brazil and Venezuela, and three from Russia. The company is targeting a sustained utilization rate of over 100%, aiming for approximately 17 million tons in the current year while focusing on operational de-risking through its desalination plant.

Strategic Shift to Retail and Marketing

The company is aggressively expanding its retail footprint, targeting 150 new outlet additions in FY26 to build on its current network of 167. Management expects retail sales volume to cross 300 TKL in the next year, up from 230 TKL in FY25. This shift is intended to capture higher integrated margins, with management projecting long-term retail margins of approximately ₹3 per liter on both petrol and diesel.

Value-Added Product Maximization

MRPL is successfully pivoting its yield toward high-value molecules rather than just volume. Aviation Turbine Fuel (ATF) output grew by 31% YoY, while benzene production from the aromatic complex surged by 65% YoY. The distillate yield reached 83% in Q4, reflecting a strategic focus on middle distillates and petrochemical precursors like reformate, which saw a 50% improvement in output.

Infrastructure and Efficiency Investments

A significant portion of the ₹1,000 crore annual capex is earmarked for infrastructure projects like the grid power upgradation, expected to be completed by December 2025. This project alone is projected to reduce fuel and loss by 0.3% to 0.4% over the next 18-24 months. Additionally, the company is investing in a new bitumen train and a wet gas scrubber in the PFCC unit to enhance reliability and margins.

Debt Management and Financial Health

Despite ongoing capital expenditure, MRPL has maintained a stable leverage profile with a net debt-to-equity ratio of 0.99. Total debt stands at ₹13,227 crores as of March 31, 2025. Management expects to maintain debt-to-equity at current levels even as they deploy ₹2,000 crores in capex over the next two years, relying on internal accruals and improved operational cash flows.

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