Mangalore Refinery and Petrochemicals Limited: history, ownership, mission, how it works & makes money

A Brief History of Mangalore Refinery and Petrochemicals Limited

Mangalore Refinery and Petrochemicals Limited (MRPL), established in 1988, is a public sector company under the ownership of Oil and Natural Gas Corporation Limited (ONGC). The refinery is strategically located in Mangalore, Karnataka, with a capacity of approximately 15 million metric tonnes per annum (MMTPA). This capacity makes it one of the significant players in the Indian refining sector.

In 1991, MRPL was commissioned to commence operations with a capacity of 3 MMTPA. Over the years, MRPL has undergone several expansions and modernizations, including an upgrade in the technology used and the processing of a wider range of crude oils.

By 2014, MRPL had completed its extensive expansion project, which increased its refining capacity to 15 MMTPA. This expansion was significant in positioning MRPL as a competitive entity in the global petroleum sector.

As per the financial year 2022-23, MRPL reported a total revenue of approximately INR 1,01,743 crores, reflecting substantial growth compared to INR 67,717 crores in the previous year. The net profit for the same year stood at INR 3,361 crores, an increase from INR 678 crores in fiscal year 2021-22.

MRPL's technological advancements include the adoption of modern refining processes such as Fluid Catalytic Cracking (FCC), Hydrocracking, and the use of environment-friendly practices that align with global sustainability standards.

In fiscal year 2021-22, MRPL processed approximately 13.5 million metric tonnes (MMT) of crude oil, while in 2022-23, this number rose to 14.0 MMT. The increase in crude processing capacity is indicative of the growing demand for petroleum products in India.

MRPL’s product portfolio includes a wide array of petroleum products, ranging from LPG, diesel, and kerosene to more complex petrochemicals, such as polypropylene and linear alkyl benzene. In 2022-23, the company produced approximately 8.5 MMT of diesel and around 1.4 MMT of jet fuel.

The stock performance of MRPL has shown resilience, with a share price trading at approximately INR 96 per share as of October 2023, reflecting a market capitalization of around INR 36,000 crores. The stock has seen a performance increase of about 21% over the last year, aligning with the upward trend in crude oil prices and demand recovery post-pandemic.

Furthermore, MRPL has embarked on a journey towards achieving net-zero carbon emissions by 2030. This initiative involves investments in renewable energy projects and enhancing operational efficiencies. The budget allocated for these initiatives is approximately INR 2,000 crores over the next five years.

The company is also focusing on expanding its marketing network across India, aiming to strengthen its reach and enhance its product availability in various regions. As of 2023, MRPL operates more than 800 retail outlets, and plans to double this number by 2025.

A Who Owns Mangalore Refinery and Petrochemicals Limited

Mangalore Refinery and Petrochemicals Limited (MRPL) is a public sector company based in India, primarily engaged in refining petroleum and producing petrochemicals. As of October 2023, the ownership structure of MRPL is predominantly influenced by its parent company, Oil and Natural Gas Corporation Limited (ONGC).

MRPL operates under the regulatory framework of the Ministry of Petroleum and Natural Gas in India, with ONGC holding the majority of shares. The company was originally established in 1988 and has since expanded its refining capacity to approximately 15 million tonnes per annum.

The company’s financial performance and shareholding patterns are regularly updated in financial filings and stock exchange disclosures. As of the latest financial report for Q2 FY 2023-24, MRPL reported a revenue of ₹33,540 crores, with a net profit of ₹1,320 crores.

In addition to ONGC, other notable institutional investors include mutual funds and foreign institutional investors, which contribute to the public shareholder category. The diversity in shareholding reflects MRPL's strategic importance in the oil and gas sector.

MRPL’s stock is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) of India, where it trades under the symbol "MRPL". As of October 2023, MRPL's stock price is approximately ₹74 per share, which reflects a market capitalization of around ₹18,000 crores.

Overall, MRPL is primarily owned by ONGC, with public shareholders holding the remaining equity. The ownership and structural dynamics of the company position it strategically within the Indian oil and gas industry, enhancing its ability to leverage synergies from ONGC's operations.

Mangalore Refinery and Petrochemicals Limited Mission Statement

Mangalore Refinery and Petrochemicals Limited (MRPL) is a key player in the Indian petroleum sector and operates with a clear mission focused on excellence in refining and downstream petrochemical production. The mission emphasizes sustainable business practices, customer satisfaction, and operational efficiency.

MRPL's mission statement encapsulates several core principles:

• To operate the refinery with optimal capacity utilization.
• To ensure the production of quality products that meet customer expectations.
• To promote environmental sustainability while optimizing resource usage.
• To invest in technologies that enhance operational efficiency.
• To uphold high standards of safety and health in all operations.
• To contribute to the economic development of the community and country.

As of the financial year 2022-2023, MRPL reported revenues of ₹39,542 crore, demonstrating a robust operational capacity. The company has a refining capacity of 15 million metric tonnes per annum (MMTPA). In terms of profitability, MRPL posted a net profit of ₹1,051 crore for the same fiscal year.

Notably, MRPL's commitment to sustainability is underscored by its efforts to reduce carbon emissions. In 2023, the company achieved a reduction of carbon emissions by approximately 30% compared to 2021 levels. This initiative aligns with their focus on minimizing their environmental impact.

The following table outlines MRPL's key operational and financial metrics for the fiscal year 2022-2023:

MRPL’s mission is not just a statement; it’s backed by tangible efforts and results in line with its operational goals. The company continues to explore advancements in refining technology, fostering a culture of safety, and implementing initiatives that benefit the community, thereby reinforcing its commitment to sustainable development.

How Mangalore Refinery and Petrochemicals Limited Works

Mangalore Refinery and Petrochemicals Limited (MRPL) is a major player in the Indian oil and gas industry, focusing on refining and producing petrochemicals. The company operates an advanced refinery situated in Mangalore, Karnataka, with a processing capacity of approximately 15 million metric tonnes per annum (MMTPA).

As of the first quarter of 2023, MRPL reported a refining throughput of around 4.1 million tonnes, showcasing its capacity utilization prompted by rising fuel demand. The company has been able to achieve a robust Gross Refining Margin (GRM) of approximately USD 9.5 per barrel, reflecting a favorable market environment.

Operations and Product Portfolio

MRPL focuses on a variety of petroleum products, including diesel, petrol, kerosene, and liquefied petroleum gas (LPG). Additionally, MRPL has ventured into specialty petrochemicals, thereby diversifying its product line. The product mix is approximately as follows:

Furthermore, through strategic partnerships and investments, MRPL has enhanced its technological capabilities aimed at increasing operational efficiency and achieving sustainability goals.

Financial Performance

For the fiscal year ending March 2023, MRPL reported a total income of around INR 73,872 crores, along with a net profit of INR 4,229 crores. This marked a significant growth compared to the previous fiscal year, driven by higher crude oil prices and increased refinery margins.

The company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the same period was approximately INR 7,412 crores. The overall debt-to-equity ratio stood at 1.02, indicating a balanced capital structure.

Market Position and Share Performance

MRPL is a public sector undertaking, with a significant market cap of around INR 27,000 crores as of October 2023. The stock has shown resilience with a Year-to-Date (YTD) return of approximately 25%, outperforming many of its peers in the industry.

The share price of MRPL was trading around INR 88.50 on October 20, 2023. The company's P/E ratio is approximately 6.4, which is attractive compared to the industry average of 10.1.

Challenges and Strategic Initiatives

MRPL faces challenges such as fluctuating crude oil prices and regulatory pressures. In response, the company has implemented several strategic initiatives:

• Investment in Technology: Focusing on improving the efficiency of its refining processes through advanced technology.
• Diversification: Expanding its portfolio to include petrochemical products that yield higher margins.
• Sustainability Efforts: Investing in green technologies and renewable energy to reduce carbon footprints.

These initiatives aim to bolster MRPL's market position while ensuring long-term sustainability and profitability.

How Mangalore Refinery and Petrochemicals Limited Makes Money

Mangalore Refinery and Petrochemicals Limited (MRPL) generates revenue primarily through the refining of crude oil and the production of petrochemicals. As of the latest financial reports, MRPL's total revenue for the fiscal year 2022-2023 was approximately ₹45,000 crore, marking a significant increase from the previous year’s revenue of ₹30,000 crore.

The refining segment contributes the majority of the revenue. MRPL has a refining capacity of 15 million metric tonnes per annum (MMTPA), and the company processes various grades of crude oil. In FY 2022-2023, the average gross refining margin (GRM) was approximately USD 7.5 per barrel, which is a considerable rise compared to USD 4.6 per barrel in FY 2021-2022.

Additionally, MRPL produces a range of products, including gasoline, diesel, kerosene, and petrochemicals. The breakdown of product sales for the same fiscal year is as follows:

In terms of operational efficiency, MRPL has continuously focused on optimizing its refining processes. As of March 2023, the company reported a utilization rate of 107%, reflecting its ability to exceed designed capacity during high demand periods. This efficiency positively impacts gross profit margins.

Moreover, the company has engaged in strategic partnerships and joint ventures to enhance its market position. For instance, MRPL has a partnership with Hindustan Petroleum Corporation Limited, which helps in expanding its market reach and operational synergies.

MRPL also benefits from favorable government policies. The Indian government’s thrust on increasing domestic oil refining capacity and reducing import dependency has provided an advantageous regulatory environment. With initiatives such as the National Policy on Biofuels, MRPL is also exploring biofuel production opportunities, which may diversify its revenue streams.

Furthermore, MRPL's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for FY 2022-2023 was approximately ₹5,500 crore, reflecting an EBITDA margin of about 12.2%. This represents a healthy growth compared to the last fiscal year's EBITDA margin of 10%.

Additionally, the company maintains prudent financial management, with a reported net debt of ₹10,000 crore against a net worth of approximately ₹15,000 crore as of FY 2022-2023, resulting in a debt-to-equity ratio of 0.67.

The market conditions and crude oil price fluctuations significantly impact MRPL's profitability. For instance, Brent crude prices averaged around USD 85 per barrel in 2022, affecting the company's cost structure and pricing strategies.

To summarize MRPL's approach to generating revenue, the company leverages its refining capability, product diversity, operational efficiency, strategic alliances, and favorable market conditions. All these factors contribute to MRPL's profitability and overall financial health.