Mangalore Refinery Shares Plunge Over 8% Following Q1 Loss: What’s Behind the Drop?
Mangalore Refinery and Petrochemicals Ltd. (MRPL) shares have plummeted over 8% during early trade on Monday, following the company’s announcement of a net loss in the first quarter of this financial year.
In its quarterly earnings report, MRPL posted a standalone loss of Rs 271.97 crore in the quarter ended June, compared to a profit of Rs 363.4 crore in the previous quarter. The company’s revenue from operations fell 29% to Rs 17,356 crore, while operating income sank 84% to Rs 180 crore. Margin contracted to 1% from 4.6% in the March quarter.
The first quarter earnings were impacted due to a longer-than-planned shutdown at the phase-II refinery (6-7 Million Tonnes Per Annum capacity, which produces high-value products) in May and June. Exports, which contribute 23% of revenue, also declined as a result of lower plant utilisation and the non-availability of the feedstock.
MRPL is majority owned by Oil and Natural Gas Corp. The stock has risen 35% in the last 12 months and 6% on a year-to-date basis. However, the recent Q1 loss has put a dent in investor sentiment, leading to a significant decline in the stock price.
A Closer Look at the Q1 Loss
The standalone loss of Rs 271.97 crore in the quarter ended June is a significant departure from the company’s previous quarterly profits. The loss was primarily due to the shutdown of the phase-II refinery, which resulted in lower revenue and higher costs. The decline in exports also contributed to the loss, as the company was unable to utilise its production capacity due to the non-availability of feedstock.
What’s Next for MRPL?
Despite the recent decline in the stock price, MRPL remains one of the major players in the Indian oil and gas sector. The company’s long-term prospects are still intact, and investors may see this as an opportunity to buy into the stock at a relatively low price.
However, the company will need to address its operational issues and improve its profitability to regain investor confidence. The recent shutdown at the phase-II refinery is a major concern, and the company will need to ensure that it is able to resolve this issue quickly to avoid further losses.
Conclusion
In conclusion, MRPL’s Q1 loss has sent shockwaves through the Indian stock market, and the company’s shares have plummeted over 8% as a result. However, investors should not write off the company just yet. With its long-term prospects still intact, MRPL may be an attractive opportunity for those looking to buy into the stock at a relatively low price.
