Miniratna PSU stock fell 21% from record high in 2024; time to buy?

Shares of Mangalore Refinery and Petrochemicals Ltd (MRPL) are down 21% from their record high this year. The Miniratna PSU stock, which rose to a record high of Rs 289.25 on February 19 this year, was trading at Rs 227.65 in early deals today. However, shares of MRPL have zoomed 273.73% in a year and gained 101% in six months. Amid a stellar rally of 274% in the last one year, the multibagger stock saw an average volatility with a beta of 1 during the period.

In terms of technicals, the relative strength index (RSI) of the MRPL stock stands at 46.1, signaling it's trading neither in the overbought nor in the oversold zone. However, MRPL shares are trading lower than the 5 day, 10 day, 20 day, 50 day but higher than the 100 day, 150 day and 200 day moving averages.

In the current session, MRPL shares slipped 1.92% to Rs 225 against the previous close of Rs 229.40. Market cap of the firm fell to Rs 39,443 crore. 

Total 2.11 lakh shares of the firm changed hands amounting to a turnover of Rs 4.86 crore on Tuesday. 

Prabhudas Lilladher has maintained its sell call and assigned a price target of Rs 138 on the MRPL stock.

"Average Singapore GRM in Q1FY25-TD is at US$4/bbl and we believe GRMs in the long term are likely to remain weak given adequate refining capacity additions in China and India amid weak demand prospects. Thus, we factor in a GRM of US$6/6/bbl for FY25/26E. Maintain ‘Sell’ rating with a target price of Rs 138 based on 6x FY26 EV/EBITDA," said the brokerage.

Osho Krishan from Angel Broking said, "MRPL has been in a cycle of higher highs – higher lows in the broader time frame. However, in the last two sessions, the counter has attracted an intense bout of correction and slipped nearly 15 percent to breach the 50 DEMA on the daily chart. For now, looking at the intensity of the sell-off, the support of 200-190 is very much in the vicinity and is likely to be seen as a pitstop for the bears. Once the volatility subsides then one may look for an opportunity to re-enter the counter. On the higher end, 240-250 remains the intermediate hurdle and a decisive breakthrough could only trigger the fresh round of longs in the counter."

Motilal Oswal has assigned a price target of Rs 175, a downside of 24% to the current market price of Rs 229.

"We like its strong FCF generation of Rs 34.8b/Rs 35.2b in FY25/26 and reduction in debt, resulting in a declining Net Debt/Equity ratio of 0.5x by the end of FY26 (vs. 0.94x currently). MRPL guided Rs 8,000 crore of capex over the next five years towards:

• Increasing petchem integration from 10.0% to 12.5%,
• Increasing total retail outlets to 1,000 by FY27 (from 100 currently)
• Launching Isobutyl-benzene, with a pilot plant already awarded

However, at 2.5x FY26E P/B, we believe the valuations remain expensive; especially, given its FY26E RoE of 15.4% as per our calculation. As such, we reiterate our Sell rating with a target price of Rs 175, implying 24% potential downside from current levels, " said Motilal Oswal.

Ganesh Dongre, Senior Manager, Technical Research Analyst, Anand Rathi Shares & Stock Brokers said, "On the daily chart, stock has seen a bearish engulfing pattern, which is bearish in nature. Also looking towards the other parameter, RSI is still turning downward. So, the upcoming support for the stock is around Rs 180–200 zone. Traders can buy on dip near the support level with the stop loss of Rs 180 for the target price Rs 260."

Abhijeet from Tips2trades said, "MRPL stock price is  bearish on the Daily charts with strong resistance at Rs 242. A Daily close below support of Rs 215 could lead to a fall till Rs 189 in the near term."

MRPL’s Q4 net profit slipped 40% to Rs 1,137 crore against Rs 1,908 crore in the corresponding period of 2022-23. Revenue from operations stood at Rs 29,190 crore in Q4 against Rs 29,401 crore in Q4 of 2022-23. Revenue from operations stood at Rs 1,05,223 crore for the fiscal 2023-24 against Rs 1,24,736 crore in 2022-23.

The company declared a final dividend of Rs 2 per share. The oil refiner PSU recorded a 36.32% rise in PAT to Rs 3,596 crore in FY24 against Rs 2,638 crore in FY23.

The company logged a gross refining margin (GRM) of $11.35 a barrel in Q4 against a GRM of $15.12 a barrel in the corresponding period of 2022-23. The company’s GRM was at $10.36 a barrel for the fiscal 2023-24 against $9.88 a barrel for 2022-23. (GRM is the difference between the price of crude oil and the end products.)

MRPL (India) Limited provides value added services. The company operates through three segments: Project Management Consultancy (PMC), Real Estate Development, and Engineering Procurement and Construction (EPC). PMC segment is engaged in civil construction projects, infrastructure works for the national security, infrastructure projects for the civil sector, and project implementation for Pradhan Mantri Gram Sadak Yojna (PMGSY) and developmental work in Northeastern Region.