MRPL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 3.6

📊 Financial Overview

• Profitability: Quarterly PAT surged to ₹639 Cr from a loss of ₹272 Cr — a 194% turnaround
• Margins: ROCE at 4.36% and ROE at 0.40% — both remain weak despite profit recovery
• Debt Profile: Debt-to-equity ratio of 0.81 — moderate leverage for a refining company
• EPS: ₹5.90 — modest earnings base for current valuation

📈 Valuation Metrics

• P/E Ratio: 28.2 — above industry average of 20.7, suggesting overvaluation
• P/B Ratio: ~2.2 — relatively high for a cyclical sector
• PEG Ratio: -0.38 — negative due to inconsistent earnings growth
• Intrinsic Value: Estimated around ₹140–₹150 based on normalized earnings

🏢 Business Model & Competitive Edge

• Core Operations: MRPL is a major oil refining subsidiary of ONGC, with a capacity of 15 MMTPA
• Moat: Strategic location and integration with ONGC provide supply chain advantages
• Growth Drivers: Improved GRMs (Gross Refining Margins), export demand, and capacity utilization

📌 Entry Zone Recommendation

• Suggested Entry: ₹140–₹150 — near DMA200 and below current RSI levels
• Technical Indicators: RSI at 75.6 (overbought), MACD positive — short-term momentum strong

📈 Long-Term Holding Guidance

• Suitable for short- to medium-term trades based on refining cycle
• Long-term investors should wait for consistent ROE/ROCE improvement and better valuation

✅ Positive

• Strong quarterly profit turnaround
• Improved refining margins and operational efficiency
• Backed by ONGC — strategic and financial support

⚠️ Limitation

• Low ROE and ROCE despite profit surge
• High P/E and negative PEG ratio
• FII holding declined slightly

📰 Company Negative News

• Return ratios remain weak despite profit recovery

🌟 Company Positive News

• Q4 FY25 profit of ₹639 Cr vs loss of ₹272 Cr in Q3
• Technical analysts recommend buy with target of ₹167–₹172

🏭 Industry

• Refining sector is cyclical and sensitive to crude prices and GRMs
• Industry P/E at 20.7 — MRPL trades at a premium

🧾 Conclusion

• MRPL is a turnaround story with strong short-term momentum
• Long-term investors should be cautious due to weak return metrics and high valuation