Mangalore Refinery & Petrochemicals Ltd (NSE: MRPL) Q1 2026 Earnings Call dated Jul. 21, 2025
Corporate Participants:
Unidentified Speaker
Shyamprasad Kamath — Managing Director
Devendra Kumar — Director (Finance) and Chief Financial Officer
Analysts:
Unidentified Participant
Ramesh — Analyst
Sabri H. Hazarika — Analyst
Pratyush Kamal — Analyst
Kishan Mundra — Analyst
Ketan Mehta — Analyst
Presentation:
Unidentified Speaker
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Unidentified Speaker
Sam it.
Unidentified Speaker
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operator
Ladies and gentlemen, good day and welcome to Mangalore Refinery and Petrochemicals Limited Q1FY26 results call hosted by Prabhudas Leela, the Private Limited. As a reminder, all participant lines will be in lesson only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Swanendu Bhushan. Thank you. And over to you.
Unidentified Participant
Thanks, Bhavya. On behalf of PL Captain, we would like to welcome all the participants to quarter one conference call of MRPN. From the management, we have Managing Director Mr. M. Shyamprasad Kamath. We have Director Finance and CFO Mr. Devendra Kumar. We have Director Refinery Mr. Nand Kumar. We have ED Projects Mr. BHP Prasad. ED Marketing Mr. Deepak Prabhakar and Group General Manager Finance Mr. Suvas Chandra Pai. I would now like to invite the management to share their opening remarks on the results which we will follow the session with Q and A. Over to you, sir.
Shyamprasad Kamath — Managing Director
Yeah.
Shyamprasad Kamath — Managing Director
Good afternoon everyone and thank you for joining us on this first quarter earnings call. I am M. Shantra Saad Kamath, Managing Director and CEO of mrtn. Along with my leadership team, I will walk you through our Q1 performance, the operating environment we faced and our near term priorities. First on the operating highlights. Throughput. We processed 3.52 million metric tons of crude and other feedstocks although the volumes were lower year on year primarily because of the planned turnaround. On April alone, companies set a record processing of 1.51 million metric tons underscoring the inherent capacity of the refinery over once all units are online on fill in loss and product ease.
The distillate yield for the quarter was 80.97% in line with what we have achieved in our previous quarters. The company posted a fill in loss of 11.41%. However, our adjusted F and L due to the turnaround the number would be somewhere around 10.1% for the quarter. Financial performance. Revenue from operations came in at 20,983 crores reflecting both the lower throughput and almost a 20% drop in the benchmark crude prices compared to last year. Q1 and an 8% drop sequentially. Gross refining margin averaged at $3.88 per barrel down from $4.70 per barrel in Q1 previous year and $6.23 per barrel.
In Q4 2425 our EBITDA was at 218 crores and a PAT loss of 272 crores. Roughly that loss is attributable to the plant shutdowns and the inventory loss. Both are transient effects on the market context. Global refining margins were better during the quarter due to supply disruptions and normal demand growth. Refining closures in 2526 are expected to support the cracks going forward. However, crude price shocks impacted the bottom line in the last quarter. On the domestic front, the diesel demand grew at a north almost at an average of 2% year on year while the gasoline remained resilient at around 7% growth.
Both these trends support our marketing focus in southern and western part of the country. All our major units are back in service now and we expect the throughput in quarter two to be above 4.3 million metric tonnes with the GRM already showing stronger in July. If the crude prices do not fluctuate too much we should be able to post good numbers, go hangar and rest of the remaining quarters. This physical in short Q1 was operationally challenging but strategically necessary quarter. The refinery is now positioned to run at historically high levels. Now I hand over the call to our Director, Finance and CFO to talk about the financial details.
Devendra Kumar — Director (Finance) and Chief Financial Officer
Good afternoon everyone, this is Devind Kumar. I will briefly let you know the key numbers and reasons behind them. The top line contracted largely because of first about 0.8 MMT reduction in throughput versus the previous year quarter one due to planned phase two shutdown point two about 20% year on year in fallen benchmark crude prices. Lower volumes especially at the time of good cracks in June resulted in lower EBITDA While depreciation at 363 crores and finance cost at 255 crores also rose slightly during the quarter. Roughly the loss is attributable to shutdown, turnaround and inventory valuation.
Due to the impact of crude price slide, the refinery returned to full service in late June. July cracks are already above the Q1 average. There are some points which I would like to highlight. Operating expenses came in at rupees 601 crore which is slightly lower than the previous quarter due to shutdown effect. The fuel and loss impact for the quarter is transient as MD sir has already explained in his talk. Finance cost at 257 crores rose 6% quarter on quarter due to short term debt which was raised to fund the turnaround and related activities. Gross Debt starts at 13,608 crores net worth is 12,657 crores giving a debt equity of 1.08.
The ratio is expected to improve as earnings rebound in the coming quarter. Q1 capex was 537 crore primarily due to the shutdown expense. Total annual CAPEX is expected to be around 1000 crores including the shutdown expenses which have already been incurred. With all units back, we are targeting GRM in the high single digit range for Q2 supported by stronger middle distillate cracks and internal fuel loss reduction initiatives. There are specific tasks assigned to the team to bring up cost leadership in the organization. We are also very selective on the CAPEX spending and objective is to reduce the debt as far as possible.
Despite a deliberately compressed quarter, our financial foundation remains resilient and the refinery is now positioned to deliver materially higher throughput. We remain committed to prudent capital allocation, disciplined cost management and value accretive growth. Thank you for your time. We are happy to take your questions now.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on your touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ramesh from Nirmal Bank Equities Private Limited. Please go ahead.
Ramesh
Thank you very much for the call. So my first question is how much was the inventory loss in dollars per barrel in the first quarter? And if you didn’t have the shutdown what would have been the GRM in first quarter?
Ramesh
Hello?
Shyamprasad Kamath
Yeah, yeah, the grm. If the shutdown was not there we would have been somewhere around, somewhere around $8. So the impact of the inventory loss is around $2 and with no shutdown it would have been another $2. So overall it could have been closer to around $8. Would have been a GRF.
Ramesh
Okay, so if you’re looking at the current cracks since you mentioned high single digits, would it be similar to this $8 higher or lower? What is the kind of current run rate in terms of the crack spreads and DRM?
Shyamprasad Kamath
It could be slightly higher than. Higher than $8 per barrel.
Ramesh
So yeah, if you look at your parasylene plant, what is the kind of operating rate you had, how much of sales you had in Paris and how much of the profit or loss from Parasite is included in the first quarter as well?
Shyamprasad Kamath
We are not operating. We Are operating the complex on a reformic mode and we continue to operate the complex on reform mode only. And the margins from the EPX complex while we have operated on the refining margin was around almost half a dollar per barrel.
Ramesh
Margin, about $0.50 is from the parasync. Okay, fine. So how do you see the paraxylene prospect? Because right now if you see paraxylene PTA, polyester changes under pressure. So do you see any plant closures like in defining, do you see any signs of recovery or we should count on just the refining business to do well in the next nine months.
Shyamprasad Kamath
In the short term the PX outlook appears to be not coming up as you mentioned and we do look at the kind of economics on which mode of operation and then take a call.
Ramesh
So one final thought in terms of marketing, how many retail outlets you have and what is the kind of retail margin that you have included in the first quarter result? And obviously there’s been some reduction in that. So what is the kind of number of retail stations you plan to add and the growth in retail volumes you can expect in FY26 and 27?
Shyamprasad Kamath
As on date we have about 170 retail outlets which we have commissioned and during the year we plan to add probably another hundred retail outlets and our target is to go to closer to 300. But yes, our target immediate short term is to achieve another 100 in this financial year. On the margin front from the retail we brought in about 60 crores during the quarter.
Shyamprasad Kamath
And aruda in the retail sales volume I can get the information.
Shyamprasad Kamath
About 68,000 KL.
Ramesh
68,000 KL. This is for the quarter, right?
Shyamprasad Kamath
Yes.
Ramesh
And how do you see the increase by the end of the year? And what can you do say in FY27 once this 270 retail outlets are in place?
Shyamprasad Kamath
We did about 200 and 230k TKL last financial year. Target is to reach at least to go to around 300 to 325TKL this year.
Ramesh
Okay, and how much would that increase in FY27 based on the, you know, 270 outlets by the end of the year.
Shyamprasad Kamath
Can you, can you, can you come back on your question please?
Ramesh
Based on the 300, 325,000 nitrogens you do by the end of FY26? What is the kind of growth you can expect in the retail sales volume in FY27 once you have the 270 retail outlets, you know, by the end of FY26?
Shyamprasad Kamath
So we target to achieve about 500 TKL.
Ramesh
Okay, sir. Thank you very much. I will come back in the.
operator
Thank you. Before we take the next question, we would like to remind participants to press star and one to ask question. The next question is from the line of Sabri Azarika from MK Global Financial Service. Please go ahead.
Sabri H. Hazarika
Yeah, so I have a few questions. Firstly, you. You mentioned the net debt number as how much? 12,600 crore.
Shyamprasad Kamath
Yeah, correct.
Sabri H. Hazarika
So it was 12,800 crore which has come down to 12,600 crore. Q OQ right.
Shyamprasad Kamath
Yeah.
Sabri H. Hazarika
Okay. Second is on your.
Sabri H. Hazarika
If I.
Sabri H. Hazarika
If I go, I mean how is the polypropylene plant doing currently? Are you. What kind of like Delta are you realizing? Is it generating any profit or still it is under pressure? Given that broader margins are not good.
Shyamprasad Kamath
Polypropylene plant at 100% capacity even during the quarter one also we could manage to run that plant because the feeding unit was operational and when we were managing it on the margin front. Since the PPE is produced through a from the. If I can take to the crew directly and it’s not from the nafta, the margins are better compared to looking from an anethylene cracker.
Shyamprasad Kamath
So.
Shyamprasad Kamath
So it’s like crude propylene polypropylene.
Shyamprasad Kamath
Right?
Sabri H. Hazarika
That is the chain.
Sabri H. Hazarika
Right.
Shyamprasad Kamath
So and versus propylene versus polypropylene the margins are okay or that is not that great.
Shyamprasad Kamath
That is okay.
Shyamprasad Kamath
That is.
Shyamprasad Kamath
That is okay.
Sabri H. Hazarika
Okay. So standalone. If I take that assuming that your refinery produce a supplying propylene is a third party, then how is the plant doing?
Shyamprasad Kamath
You mean to say somebody buying propylene and then producing polypropylene?
Sabri H. Hazarika
Yeah, I mean if I separate this plant come into a different unit and I assume that it is buying from your refinery the propylene, then what is the economics?
Shyamprasad Kamath
That could be a. You know, we don’t look at that kind of bifurcation because ultimately when we look at overall economics you look at all these things put together.
Sabri H. Hazarika
Okay, okay, got it. And last question is on this ompl. I mean your aromatic complex. So. So this Gale PTA plant should be ready I think in the next one year. So right now, still the PX economics, if that plant comes still the PX economics are not great to produce PX and continue with reform it. Or there is a case for like shifting the mode to px. Then if that GMPL plan comes, it.
Shyamprasad Kamath
Is again subject to economics. If we are able to strike a deal with gmpl, definitely we would like to give it to the next store. But it is all subject to economics. And what’s the kind of. We are able to strike the deal between the two companies.
Sabri H. Hazarika
So right now it will continue on that reformat mode. And you are, you are saying you are getting something like 0.$5 per barrel from.
Shyamprasad Kamath
Yeah.
Sabri H. Hazarika
Okay. Okay. Thank you so much.
Shyamprasad Kamath
Thank you.
Devendra Kumar
If I heard you correctly, the debt starts at 13 608.
Sabri H. Hazarika
Yeah.
Sabri H. Hazarika
That is gross net debt would be.
Shyamprasad Kamath
Same.
Sabri H. Hazarika
Net Debt is also same 136 08.
Shyamprasad Kamath
Yes.
Sabri H. Hazarika
Okay. Okay, thanks.
operator
Thank you. Participants, to ask a question, you may press star and 1. The next question is from the line of Pratyush Kamal from Incred Equities. Please go ahead.
Pratyush Kamal
Hello sir. Am I audible?
Shyamprasad Kamath
Yeah, you’re audible.
Pratyush Kamal
Yeah. So I just wanted to understand this mathematics of 0.$5 per barrel. Whenever you are, you know, get, you are getting this benefit through the petrochemical integration. So what is this about? And second was regarding this reform it more so when you’re saying that, you know, you’re running this on a reformat mode was what does it actually mean?
Shyamprasad Kamath
Good. See, the. The complex we can operate, we can shut. We have shut down the paraxylene part of the complex. And what we do is we operate it to a phase where we make this reformat which is a base blend stock for either making paraxylene or it can go. Going for an Ms. Blender. So we are making. We are operating only part of the complex where we are selling this reformat and we are extracting some benzene also and adding value to it.
Pratyush Kamal
And how is this reform? Yeah, and how is this reformer made? Is it?
Shyamprasad Kamath
I will explain. I’m under questionary. This aromatic, the format is actually the intermediate formed first. Then it is further converted to produce paragliding. So what we are presently doing is we produce the reformat that’s a basic first converter unit and then we practice a blend stock and sell it. If PX margins were good, hypothetically, then we would have processed further the same reform it and made px which is presently. That market is not that great. You are asking where the reformat is made. So reformatory produced in this complex.
Pratyush Kamal
Understood. So this reformat is ultimately made from the, you know, from NASA or through the Rock group. So how do you actually move the reformation?
Shyamprasad Kamath
It’s made from naphtha, actually. So.
Shyamprasad Kamath
And this again. So what are the different products other than PX to which you can use this reformat? You can use first in the PX production, other in the. In this Ms. Production or Ms. Branding. So is there anything Else also which you can do through this, through this, reform it and you can ultimately get the benefit whenever the margins are high in that product.
Shyamprasad Kamath
Presently yes, your understanding is right. Basically it can be made for Ms. Bending PX and other components like basically benzene which is the byproduct we are also producing. We have also started some amount of extraction from the complex and we are that also we are selling as a product now. We just started last year.
Pratyush Kamal
Understood sir. And what is this $.5 per barrel addition to the petrochemical all about?
Shyamprasad Kamath
So this is that margin which is being, which we have estimated coming from the the paraxylene complex.
Pratyush Kamal
Thanks a lot.
operator
Thank you. The next question is from the line of Kishan Mundra from Dam Capital. Please go ahead.
Kishan Mundra
Hi sir, thanks for taking my questions. 2 set of questions. So firstly data keeping. 1 sir, could you share what is your current or what was your Russian crude lending during the quarter and what was the discount that you realized on this crude?
Shyamprasad Kamath
See the kind of Russian barrel that we are currently getting is something similar to an average whatever the Indian as a country as we are importing there is no much difference in that. And the discounts also are in the same range what the Indian other counterparts are getting. Even though the discounts have come down slightly. But yes it is more or less we are in the same lines at what the other Indian refineries are getting.
Kishan Mundra
Which would be like 2 and a half to $3 range delivered India. Would that be a correct assumption?
Shyamprasad Kamath
You can say plus, minus something there.
Kishan Mundra
Okay, okay, understood. And then the second question, I mean I know it’s early days but still if you could share your assessment of the impact of the recent sanctions on the Russian crude that has been imposed by you. So I mean what is your assessment as far as your financials are concerned, your business is concerned and the broader market in general?
Shyamprasad Kamath
We are still trying to assess because we need to look at the fine prints. Yes, as of now the one of the countries refiner’s name has come up but we are still assessing it. It is not just the to what extent the price caps are there, how the other things are going to be, how there is impact on the fleet. We are looking at still and trying to assess that thing now. But as we speak there is, we don’t, we have not seen any challenges getting the crude at least for the month, balance, month of July, whatever are going to come.
Kishan Mundra
Okay? Okay, understood sir. Thank you.
operator
Thank you. A reminder to the participants, you may press Star and one to ask a question the next Question is from the line of Naresh Kataria from Money Curves and Electrics. Please go ahead.
Unidentified Participant
Hi sir, just one question. What is the share of diesel in your product state? And I believe diesel cracks are higher. Any thoughts if these higher cracks are sustainable due to anything going on globally?
Shyamprasad Kamath
See our middle distillate, when we say middle distillate it is ATF plus diesel. We are at around almost 50%. And again if I have to further split it as a diesel it is somewhere anywhere between 38 to 40%. So I have. We have this flexibility of trying to swing some amount of between the two products. I can go up till say up to say stretch it up to around 42% as middle distance as diesel. Sorry.
Unidentified Participant
Sure. So my second question on the sustainability of higher diesel cracks. Are diesel cracks higher currently and what do you think? I’ve seen analysts predicting higher cracks based on futures traded on us. That diesel is going to sustain higher for some time. Any thoughts and situation?
Shyamprasad Kamath
Currently the diesel cracks are high compared to what it was even in Q1. Also they are comparatively higher. It all depends on how this the recent sanctions are going to turn around. We need to really. That is where I said we need to really look at those fine prints. And going forward currently, if that really sanctions comes in, we expect that the diesel cracks are going to be further higher, higher and it all further depends on how the. How us is also going to look at this particular aspect. So it is going to be. We have to do a watchful on this particular aspect.
Unidentified Participant
Understood. The last question is I’ve seen over the years you’ve reduced your fuel and loss though it is higher compared to other refined deals. But the trend is down. So if the fuel and loss drops by 1%, does it mean you get 1% extra output for the same barrel of crude? Is that a fair understanding?
Shyamprasad Kamath
Yes, you are right.
Unidentified Participant
And that adds to margin. Right? Because we paid for the Brent, we paid for operations. But you are getting. You’re losing and wasting less.
Shyamprasad Kamath
It adds to your bottom line.
Unidentified Participant
Thank you so much.
operator
Thank you. The next question is from the line of Ramesh from Nirval Bank Equities Private Limited. Please go ahead.
Ramesh
Thank you for the follow up. So you mentioned at the beginning that you’re expecting refinery closures. Is there some number you can share in terms of how much of these Asian and global capacities are expected to close this year? And what is the trend you expect between FY 2027 in terms of refinery?
Shyamprasad Kamath
While we don’t expect any closures in the Asian market There is a closure that has been declared. One in the UK and one in the California region.
Ramesh
And what is the kind of capacity in barrels per day or per annum that’s been closed now?
Shyamprasad Kamath
Well, I am sorry, I don’t. I’m not having the numbers right now but we can share it to you subsequently.
Ramesh
That’s okay. So just dwelling on the refining margin. You have over 10 which is in the bottom product. Right. And if you see VLSFO margins are about $10 positive. And the interesting thing is compared to the long term negative margins of 15, HSFO discount is now at about minus 3, minus 5. So in the bottom of the barrel, how do you see your own ability to, you know, increase the VLS of 4 component? Is that going to be an incremental upside to your GRMs?
Shyamprasad Kamath
First of all, the bottom 7% or 8%, it’s not 10% now we are at around 7 to 8% on the bottoms. This entire 7 to 8% is not coming from BLSFO. It also includes whatever coke and sulfur also that is produced. And currently our strategy is not to not to make VLSFO rather than make more disclaims.
Ramesh
And lastly, if I can just ask you on the polypropylene business, can you share the dollar per barrel that is included in your margins from the polypropylene sales from your FCC unit?
Shyamprasad Kamath
You are asking the sales value of PPP margin margins. I don’t think we have separately no separate margins. We have done for the polypropylene.
Ramesh
Going forward, how do you see the economics of this polypropylene business? From the SEC cracker? Because globally the propylene polypropylene chain is bleeding. We see whether it is PDHPP or the traditional crackers. So yeah. Is there any rationale in running this unit or do you expect a recovery the overall polypropylene spreads and margins going forward? In terms of the economics, how do you see that?
Shyamprasad Kamath
What we understand is the polypropylene market is pretty stable. It is the polyethylenes which are which are bleeding.
Ramesh
Oh, okay. Right. So thanks a lot. Appreciate it.
operator
Thank you. The next question is from the line of Ketan Mehta from Baroda BNP Paribas Mutual Fund B. Please go ahead.
Ketan Mehta
Thank you sir for the opportunity.
Ketan Mehta
Couple of questions.
Ketan Mehta
We mentioned that we have a fuel in loss of 10.6% in the quarter.
Ketan Mehta
How much reduction we can achieve on.
Ketan Mehta
This fuel and loss when the plant operation normalizes.
Shyamprasad Kamath
Quarter one, our fuel loss was around 11, 11.4% and a normalized thing was around 10%. So we will be back to around 10% range in. That is what we are outlook is in quarter two and we have certain other projects which has lined up for reducing the fill in loss. So that is where we are targeting another almost 1% reduction in the overall filling losses going forward.
Ketan Mehta
Thank you. Another question was about the export we have exported. We exports significant share of diesel. So how much of our diesel is.
Ketan Mehta
Currently placed in the European market?
Shyamprasad Kamath
See our diesel is typically we don’t directly sell our diesel into the as I can say the end customer. It is all picked up by the through a tendering process by a trader. So we don’t foresee as of now any of our product coming into that kind of a situation. And mostly our diesel what we understand is not been going into the European market.
Ketan Mehta
Right. One last question was about the ISO project that we have under tcm. Isobutyl benzene, Isobutel benzene. Could you update us on the project and what could be the benefit of that plan?
Shyamprasad Kamath
Yeah, we have completed the factory acceptance test of the project. Now as we speak the after the test the system has been dismantled from the factory and it has been brought in and the erection is in process. We are expecting by end of August to have a mechanical completion and probably start the trial runs say by third week of September or end of September.
Ketan Mehta
Could you also remind us about the capacity capex and what could be sort of the operational margin from this project?
Shyamprasad Kamath
It is a pilot plant. It is not. It is not a full scale plant. It is a pilot plant. Demo plant. Pilot come demo plant. It’s not a commercial plant. It is a demo plant based on our technology. Once we are able to establish the product quality and get the customer satisfaction then we will getting into the a full scale to a commercial scale.
Ketan Mehta
Right. Thank you.
operator
Thank you. The next question is from the lion of Rauth Hakur from NVS brokerage. Please go ahead.
Unidentified Participant
So just wanted to know what are.
Shyamprasad Kamath
The days of shutdown in this quarter? Sir, in this quarter there is no, there is no shutdown. Please. We have completed our turnaround and the complex right now is operating at full capacity.
Unidentified Participant
Okay.
Unidentified Participant
Okay. That’s it. Yeah.
operator
Participants to ask a question, you may press Star. Ladies and gentlemen, as there are no further questions I would now like to hand the conference over to the management for the closing remarks.
Unidentified Participant
Yeah, so having this side. Thanks for attending the call.
Unidentified Participant
On behalf of the management of mrtl.
Unidentified Participant
If you have further certain query you.
Unidentified Participant
Can contact via mail and we’ll try to answer that as soon as possible.
Unidentified Participant
Thank you.
operator
On behalf of Prabhudas Leela Private Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Shyamprasad Kamath
Thank you all. Thank you.