MRPL Share Price Falls 7% Despite Profit Jump

The short version

• MRPL reported standalone net profit of Rs 1,881 crore in Q2 FY27, nearly three times the year ago figure.
• Revenue rose 37.1% to Rs 35,590 crore as earnings improved during the September quarter.
• PL Capital retained its Hold rating with a revised target price of Rs 180 per share.

Mangalore Refinery and Petrochemicals Ltd (MRPL) shares fell more than 7% during Thursday's trading session, even as the company reported a sharp rise in quarterly profit. The stock opened at Rs 189.60, compared with the previous close of Rs 185.26, before touching an intraday low of Rs 171.20 on October 15.

MRPL's standalone net profit rose to Rs 1,881 crore in the second quarter of FY27 from Rs 639 crore in the same quarter last year. Revenue from operations increased to Rs 35,590 crore, while earnings before interest, depreciation, tax and amortisation (EBITDA) more than doubled. The share price decline came despite these improvements in the reported financial figures.

The results and the stock movement point to two separate factors that investors will need to assess: the strength of recent refining earnings and the outlook for margins in the coming financial years.

MRPL Q2 FY27 results

MRPL reported higher revenue, profit before tax and EBITDA for the quarter ended September. Profit before tax rose to Rs 2,519 crore from Rs 975 crore a year earlier. EBITDA increased to Rs 3,210 crore from Rs 1,565 crore, showing a substantial improvement in operating earnings during the quarter.

Financial metric	Q2 FY27	Q2 FY26
Revenue from operations	Rs 35,590 crore	Rs 25,953 crore
Standalone net profit	Rs 1,881 crore	Rs 639 crore
Profit before tax	Rs 2,519 crore	Rs 975 crore
EBITDA	Rs 3,210 crore	Rs 1,565 crore

Revenue grew 37.1% year on year, while net profit increased to almost three times its year ago level. EBITDA also more than doubled. These figures show that MRPL's financial performance improved sharply in the September quarter, although one quarter of stronger earnings does not establish how long the improvement will last.

MRPL's first half performance

MRPL's performance was also stronger during the first six months of FY27. Standalone net profit reached Rs 2,796 crore, compared with Rs 367 crore in the corresponding period of FY26. Revenue from operations increased to Rs 77,199 crore from Rs 46,942 crore, while profit before tax rose to Rs 3,734 crore from Rs 572 crore.

Financial metric	H1 FY27	H1 FY26
Revenue from operations	Rs 77,199 crore	Rs 46,942 crore
Standalone net profit	Rs 2,796 crore	Rs 367 crore
Profit before tax	Rs 3,734 crore	Rs 572 crore

The first half figures show that the improvement extended beyond the latest quarter. However, refining earnings can change with crude oil prices, product prices and the difference between the cost of crude and the prices realised from refined products. Investors will need to assess whether the earnings level seen in the first half can continue as market conditions change.

Why did MRPL shares fall despite higher profits?

The supplied figures establish that MRPL's shares fell even as its reported earnings improved. They do not establish a single confirmed reason for the decline. A share price can respond to expectations about future earnings, changes in refining margins, broader market conditions and trading activity, as well as the latest reported results.

One factor in the available analyst commentary is the expectation that refining margins could moderate in FY28 and FY29. PL Capital raised its FY27 gross refining margin (GRM) assumption after MRPL's strong first half, but expects margins to move closer to normal levels in the following two financial years if geopolitical disruptions ease.

This distinction matters because a refinery's quarterly profit depends partly on the conditions under which it processes crude oil and sells fuel products. A strong quarter can produce higher earnings, while a later reduction in refining margins can affect future profitability. The available information does not confirm that this outlook alone caused the share price decline.

PL Capital retains Hold rating on MRPL

PL Capital maintained a Hold rating on MRPL and raised its target price to Rs 180 per share from Rs 165. The brokerage increased its estimated gross refining margin for FY27 to US$11.3 per barrel, up from US$7.8 per barrel, following the company's strong first half performance.

However, PL Capital expects gross refining margins to settle at US$7.4 per barrel in FY28 and US$7.5 per barrel in FY29 as geopolitical disruptions ease and refining cracks return towards normal levels. Refining cracks refer to the difference between the price of refined petroleum products and the crude oil used to produce them.

PL Capital estimate	Previous or current figure
FY27 estimated GRM	US$11.3 per barrel
Previous FY27 GRM estimate	US$7.8 per barrel
FY28 estimated GRM	US$7.4 per barrel
FY29 estimated GRM	US$7.5 per barrel
Revised target price	Rs 180
Previous target price	Rs 165
Rating	Hold

PL Capital based its revised target price on six times estimated September 2028 enterprise value to EBITDA. It also assigned an option value of Rs 23 per share to MRPL's chemicals project, which the brokerage said remains several years away from commercialisation.

The revised target price indicates the brokerage's updated valuation estimate. Its Hold rating remains unchanged, reflecting its assessment of the stock despite the improvement in recent earnings.

Another analyst's view on MRPL shares

Mahesh M Ojha, Vice President of Research and Business Development at Kantilal Chhaganlal Securities, identified a possible trading range of Rs 165 to Rs 168 for MRPL shares. He placed the stop loss at Rs 154 and cited potential price targets of Rs 178 and Rs 188.

Ojha's view is a trading assessment, while PL Capital's Hold rating and Rs 180 target price reflect a separate brokerage valuation. The two views have different time horizons and should not be treated as interchangeable forecasts. Neither establishes where the stock will trade next.

The difference between the current share price, the brokerages' targets and the suggested trading levels also makes it important to distinguish a short term trading setup from an assessment of a company's earnings over several years.

MRPL declares an interim dividend

MRPL's board approved a first interim dividend of Rs 3 per equity share, equivalent to 30% of the share's face value. The supplied information does not specify the record date, payment date or eligibility cut off for the dividend.

Shareholders will need the company's official dividend announcement for those details. The dividend is a separate corporate action from the quarterly earnings announcement, and its approval does not determine how the share price will move.

Fitch assigns MRPL its first international credit rating

MRPL received its first international credit rating from Fitch Ratings, which assigned the company a BBB minus rating with a stable outlook. The rating is in line with India's sovereign rating, according to the supplied information.

An international credit rating gives lenders and other market participants an assessment of a company's credit risk. The rating and its stable outlook provide information about MRPL's credit standing, but they do not guarantee future earnings or share price performance.

MRPL expands product handling operations

During the September quarter, MRPL finalised agreements to hire storage tanks for aviation turbine fuel in Goa and motor spirit and high speed diesel in Kochi. It also began product loading operations at three locations: the Aegis Terminal in Mangaluru, the Hindupur depot in Andhra Pradesh and the Ennore terminal in Tamil Nadu.

These developments relate to fuel storage and distribution. Aviation turbine fuel is used by aircraft, while motor spirit refers to petrol and high speed diesel is used in diesel powered vehicles and equipment. MRPL's storage arrangements and new loading operations add to the operational developments reported for the quarter.

The aviation fuel arrangements also connect MRPL's activities with the wider aviation sector, where fuel supply is an important operating requirement. WeloMoney has separately covered developments in India's aviation sector and leadership changes at IndiGo's parent company.

What investors should watch

MRPL's next earnings updates will help show whether the strong first half performance continues. The main factors to monitor include:

• Gross refining margins and whether they remain close to the elevated FY27 estimate.
• Quarterly revenue, net profit and EBITDA as refining conditions change.
• Progress on the chemicals project and its expected commercialisation timeline.
• The company's dividend record date and payment details.
• Further changes in brokerage estimates and the share price relative to published targets.

PL Capital's forecast of lower margins in FY28 and FY29 is an estimate, not a confirmed outcome. Future results will depend on refining conditions and other business factors. The next quarterly results should provide more evidence of whether MRPL can sustain its recent earnings performance.

About Mangalore Refinery and Petrochemicals

Mangalore Refinery and Petrochemicals Ltd is a subsidiary of Oil and Natural Gas Corporation (ONGC). Its reported activities include refining petroleum products and handling fuels through storage and distribution infrastructure. The latest quarter combined higher profits with additional product handling operations, a new international credit rating and an interim dividend approval.

Frequently asked questions

Why did MRPL shares fall despite strong Q2 FY27 results?

MRPL shares fell more than 7% during the reported session despite higher quarterly earnings. The supplied information does not establish one confirmed reason for the fall, although PL Capital expects refining margins to normalise in later financial years.

What was MRPL's net profit in Q2 FY27?

MRPL reported standalone net profit of Rs 1,881 crore in Q2 FY27, compared with Rs 639 crore in Q2 FY26. Revenue from operations rose to Rs 35,590 crore from Rs 25,953 crore.

What is PL Capital's target price for MRPL shares?

PL Capital revised its target price for MRPL to Rs 180 per share from Rs 165 and retained its Hold rating. Its valuation uses six times estimated September 2028 enterprise value to EBITDA.

How much interim dividend has MRPL declared?

MRPL's board approved a first interim dividend of Rs 3 per equity share, equal to 30% of face value. The supplied information does not state the record date or payment date.

What is MRPL's credit rating from Fitch Ratings?

Fitch Ratings assigned MRPL its first international credit rating of BBB minus with a stable outlook. The rating is in line with India's sovereign rating.

What refining margins does PL Capital expect for MRPL?

PL Capital estimates MRPL's FY27 gross refining margin at US$11.3 per barrel, compared with its earlier estimate of US$7.8 per barrel. It expects margins to ease to US$7.4 per barrel in FY28 and US$7.5 per barrel in FY29 as geopolitical disruptions ease.