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Motilal Oswal Financial maintains neutral on MRPL, target price Rs 49

The brokerage cited subdued global oil demand, incremental capacity addition and suppressed GRM for the rating.

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Updated: Dec 09, 2019, 08.49 AM IST
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Motilal Oswal Financial Services has maintained its neutral rating on MRPL in the long term with a target price of Rs 49. Shares of MRPL declined 1% to Rs 46.40 on Friday while the BSE sensex was 334.44 down at 40,445.15.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 12969.91 crore, up 40.12% from last quarter sales of Rs 9255.99 crore and down -17.43% from last year same quarter sales of Rs 15707.95 crore. The company has reported net profit after tax of Rs -1010.83 crore in the latest quarter.

The company’s top management includes Mr.Balbir Singh, Mr.G K Patel, Mr.M Venkatesh, Mr.Sanjay Kumar Jain, Mr.Sewa Ram, Mr.Shashi Shanker, Mr.Subhash Kumar, Mr.Sunil Kumar, Mr.V P Haran, Mr.Vinod S Shenoy, Mr.Vivek Mallya, Ms.C Manjula. Company has Sreedhar, Suresh & Rajagopalan as its auditors. As on 30-09-2019, the company has a total of 1,752,598,777 shares outstanding.

Investment Rationale

The brokerage cited subdued global oil demand, incremental capacity addition and suppressed GRM for the rating. MRPL’s stock price has declined 37% in FY20 YTD due to concerns about benchmark GRMs and shutdowns further impacting the performance. The brokerage expects the refining margins to remain weak while the dependence on the Nethravathi River until the desalination plant comes on stream in 2021.
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