MRPL shares jump over 9% after profitability returns in Q2, margins expand

Shares of Mangalore Refinery and Petrochemicals Ltd. (MRPL), the oil refiner jointly owned by Oil & Natural Gas Corporation (ONGC) along with Hindustan Petroleum Corporation Ltd. (HPCL).

MRPL returned to profitability during the September quarter, reporting a net profit of ₹974 crore, compared to a net loss of ₹402 crore it reported during the June quarter.

The company's revenue during the September quarter increased by 27% on a sequential basis to ₹22,648 crore from ₹17,798 crore in June.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹1,488 crore, which is more than double of the ₹622 crore it reported in June. In percentage terms, MRPL's EBITDA went up by 139% quarter-on-quarter.

Operating margins during the quarter expanded by 300 basis points to 6.5% from 3.5% during the June quarter.

ONGC has a 71.63% stake in MRPL at the end of the September quarter, while HPCL owns another 16.96%. This takes the overall promoter shareholding in MRPL to 89%, higher than the minimum public shareholding threshold of 75%.

This also leaves little free float in the market and therefore, price moves on either side could be on the extremes.

India's Mutual Funds own a 1.2% stake, FPIs own a similar quantum, while nearly 5 lakh small retail investors, or those with an authorized share capital of up to ₹2 lakh, have a 6% stake in the company as per the shareholding pattern uploaded on the BSE.

Shares of MRPL are currently trading 6.3% higher at ₹151. The stock has risen 18% in the last one month.