MRPL Q1 FY25 Results: Comprehensive Analysis and Performance Review

The first quarter of the financial year 2024-25 has been eventful for Mangalore Refinery and Petrochemicals Limited (MRPL). Despite achieving significant milestones, the company’s financial performance witnessed contrasting outcomes. 

Let’s dive into the key highlights and understand what influenced MRPL’s Q1 FY25 results.

MRPL’s mixed financial performance

MRPL reported a profit after tax (PAT) of ₹66 crore in Q1 FY25, a staggering decline of 93.53% compared to ₹1,012.74 crore in the same quarter of the previous year. This sharp decrease in profit raises questions, especially when considering the company’s revenue from operations rose by 9.89%, reaching ₹27,289 crore from ₹24,825 crore in Q1 FY24.

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MRPL refining margin challenges

One of the primary factors affecting MRPL’s profitability is the drop in its gross refining margin (GRM). GRM, the difference between the price of crude oil and the end products, stood at $4.70 per barrel in Q1 FY25, significantly lower than the $9.81 per barrel in Q1 FY24. 

This decline in GRM highlights the challenges faced by MRPL in maintaining its profit margins amidst fluctuating crude oil prices.

MRPL throughput and operational achievements

MRPL’s total throughput for April-June 2024-25 was 4.35 million tonnes, almost consistent with 4.36 million tonnes in the corresponding period of the previous year. The company achieved its highest-ever crude processing volume in May 2024, with 1,593.2 thousand metric tonnes (TMT), surpassing the previous record of 1,557.3 TMT set in January 2016. 

Additionally, June 2024 saw the highest monthly crude processing volume of 1,474.34 TMT, exceeding the previous high of 1,463.3 TMT in June 2015.

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MRPL debut of new crudes

In June 2024, MRPL processed Varandey crude from Russia and Eocene crude from the Saudi-Kuwait Neutral Zone for the first time. This followed the processing of Kaliningrad crude from Russia in April 2024. These initiatives demonstrate MRPL’s efforts to diversify its crude sources and enhance its refining capabilities.

MRPL export performance

MRPL’s exports also showed growth, standing at ₹7,564 crore in Q1 FY25 compared to ₹6,907 crore in Q1 FY24. This increase reflects the company’s strategic focus on expanding its market reach and tapping into international demand.

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MRPL financial ratios and stock performance

The debt-equity ratio of MRPL improved from 0.94 as of March 31, 2024, to 0.89 as of June 30, 2024. Despite this positive change, the company’s stock performance showed mixed results. 

On July 23, 2024, MRPL’s shares were trading at ₹205, a 4.27% dip from the previous close. However, the stock has gained 135% over the last year and 54% since the beginning of the year.

Quarterly results:

MRPL leadership changes

MRPL appointed Yogish Nayak S as Chief Financial Officer, effective July 22, 2024. Nayak, a chartered accountant with nearly 29 years of experience in corporate finance, has been with MRPL since September 1995.

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Conclusion

MRPL’s Q1 FY25 results present a mixed bag of achievements and challenges. While the company has made significant strides in operational efficiency and export growth, the substantial drop in profit and GRM indicates areas that need attention.

The debut of new crude types and improvements in the debt-equity ratio are positive signs, but the financial community will be keenly watching how MRPL navigates the fluctuating crude oil market and its impact on refining margins. 

As MRPL continues to adapt and evolve, its performance in the coming quarters will be crucial in determining its financial stability and growth trajectory.