MRPL - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 19 Sept 25, 2:16 pm

Investment Rating: 2.9

🛢️ Long-Term Investment Analysis: Mangalore Refinery and Petrochemicals Ltd. (MRPL)

MRPL presents a mixed picture for long-term investors. While its historical performance and valuation metrics suggest potential upside, current profitability and volatility raise caution.

✅ Positives

Valuation Appeal

Recent analysis shows MRPL is considered undervalued, with a valuation grade upgraded to "attractive"

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Despite a year-to-date decline of -14.73%, MRPL has delivered a 5-year return of 322.37%, outperforming the Sensex

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Dividend Yield of 2.29%: Offers moderate passive income.

Volume Surge: Current volume exceeds weekly average, indicating renewed interest.

Long-Term Price Forecasts

₹200 by end of 2025

₹300–₹550 by 2027

₹820–₹1600 by 2030

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⚠️ Concerns

Profitability Collapse

ROE of 0.40% and ROCE of 4.36% are extremely weak.

PAT dropped from ₹363 Cr. to -₹272 Cr., a staggering 515% decline.

EPS is negative at ₹-1.64.

Debt Load: Debt-to-equity of 1.02 adds financial pressure.

Technical Weakness

MACD negative and RSI neutral (58.5), suggesting indecision.

Trading below DMA 200 — bearish signal.

Institutional Sentiment: FII holding declined slightly.

🎯 Ideal Entry Price Zone

Given valuation and technical indicators

Support Zone: ₹100–₹115 (near 52-week low and historical support)

Fair Value Zone: ₹105–₹120 (based on book value and RSI reversion)

Best Entry Range: ₹105–₹120

This range offers a safer entry with valuation comfort and downside protection.

🧭 Exit Strategy & Holding Period

If you already hold MRPL

⏳ Holding Strategy

Time Horizon: 2–4 years to benefit from refinery upgrades and energy diversification.

Monitor

ROE and ROCE: Should trend above 10% for continued holding.

PAT recovery and EPS normalization.

Debt reduction and margin improvement.

🚪 Exit Strategy

Partial Exit: Near ₹180–₹200 if price approaches 2025 target and valuation stretches.

Full Exit: If ROE remains below 5% or losses persist for 2+ quarters.

MRPL is a turnaround candidate with long-term potential but short-term volatility. If you're exploring energy sector plays, I can help you compare it with IOC, BPCL, or ONGC for better stability and compounding.

Sources

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MarketsMojo

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MoneymintIdea

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SharePrice-Target.com

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www.marketsmojo.com

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moneymintidea.com

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shareprice-target.com

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