Mangalore Refinery (MRPL) : Phase III Near Completion

August 12, 2014
ICICI Securities Ltd | Retail Equity Research

Result Update

Phase III near completion
MRPL declared its Q1FY15 results with revenues at | 15743.6 crore
(up 3.1% YoY) against our estimate of | 15058.8 crore and PAT came
in at | -36.1 crore.

The revenues were marginally above our estimates on account of
marginally higher-than-expected volumes of 3.2 MMT against our
estimates of 3.1 MMT. EBITDA loss at | 147.5 crore came below our
estimate of | 343.2 crore due to lower GRMs of US$ 0.7/bbl against
our estimates of US$ 3.6/bbl due to increase fuel and loss on part
commissioning of refinery expansion. This subsequently lead to
lower PAT of | -36.1 crore.

Lower GRMs a concern, long term story intact
MRPL reported GRMs of $ 0.7/bbl in Q1FY15, which is lower than our
estimate of $ 3.6/bbl. This was mainly due to increased fuel and loss in
scenario of part commissioning of refinery expansion project. This loss
may continue for the coming quarters till the phase III expansion
completes and stabilise. Historically, MRPL has reported higher and more
stable GRMs than the other PSU refineries. FY14/Q1FY15 was a difficult
for the company as the weak macro environment and reduced supply of
Iranian crude had an adverse impact on the GRMs of MRPL. However,
with most issues easing away and most of the secondary units getting
commissioned by FY15E, we believe that the GRMs of MRPL will bounce
back in the coming years. We have estimated GRMs of US$ 3.1 per barrel
& US$ 5.7 per barrel for FY15E & FY16E, respectively.

Phase III project near completion
MRPL Phase III is in the final stage of completion and has achieved an
overall progress of 99.74% as on July 15, 2014. This refinery expansion &
upgradation project at Mangalore includes: - (1) capacity addition of 3
MMTPA and upgradation project (2) polypropylene unit and (3) single
point mooring (SPM) facility. During Q1FY15, the company commissioned
the delayed coker unit (DCU), that will crack the residual fuel oil into gasoil
and petcoke, coker hydro treater unit (removes sulphur impurities from
diesel) & two out of three SRU units. The PFCC (converts vacuum gasoil
to propylene) & one train of SRU are expected to be commissioned in
August 2014 while the physical progress of Polypropylene unit is 96.3% &
is expected to be commissioned by October 2014 from earlier
expectation of July 2014. Higher complexity on commissioning of Phase
III project will lead to an increase in distillate yield from 76.5% to 80.1%,
better capability to handle heavier & sourer crude and production of
higher margin value-added products. We have changed depreciation for
the coming year on change in accounting policy.

Best placed to play refining cycle among PSU peers
Overall, MRPL has lower policy leverage and lowest gearing on the
balance sheet amongst PSU refineries. However, with the estimate of fuel
loss due to commissioning of new projects, the GRMs of the company
may continue to be lower in the coming quarters till the expansion is
complete. We value the stock at 5.5x FY16E EV/EBITDA multiple to arrive
at a target price of | 73.

Mangalore Refinery (MRPL) | 61
Rating matrix
Rating : Buy
Target : | 73
Target Period : 12 months
Potential Upside : 20%

Whats changed?
Target Changed from | 77 to | 73
EPS FY15E Changed from | 3.9 to | 3.2
EPS FY16E Changed from | 6.3 to | 9.0
Rating Changed from Hold to Buy

Quarterly performance
Q1FY15 Q1FY14 YoY (%) Q4FY14 QoQ (%)
Revenue 15,743.6 15,268.7 3.1 19,706.8 -20.1
EBITDA -147.5 -345.6 -57.3 942.3 -115.7
EBITDA (%) -0.9 -2.3 133 bps 4.8 -572 bps
PAT -36.1 -454.0 -92.0 1,067.0 -103.4

Key financials
| Crore FY13 FY14 FY15E FY16E
Revenues 66,086.2 72,590.6 71,528.7 75,345.8
EBITDA 318.0 1,017.2 1,222.1 3,088.5
Net Profit (756.9) 601.2 558.9 1,580.8
EPS (|) (4.3) 3.4 3.2 9.0

Valuation summary
FY13 FY14 FY15E FY16E
P/E NA 17.8 19.1 6.8
Target P/E NA 21.3 22.9 8.1
EV / EBITDA 50.5 15.9 14.1 4.8
P/BV 1.7 1.5 1.4 1.2
RoNW (%) (11.7) 8.5 7.6 18.1
RoCE (%) (2.1) 2.0 4.6 16.9

Stock data
Particular Amount
Market Capitalization (| Crore) 10,691.2
Total Debt (FY13) (| Crore) 6,979.8
Cash and Investments (FY13) (| Crore) 1,605.8
EV (| Crore) 16,065.2
52 week H/L 69/26
Equity capital (| Crore) 1,752.7
Face value (|) 10.0

Price performance
Return % 1M 3M 6M 12M
Cairn India (12.3) (7.0) (6.7) 5.9
MRPL (6.9) 13.4 44.1 110.8
Reliance Ind (1.5) 2.1 20.4 13.3
Oil India (1.0) 15.9 25.7 24.4

Analyst
Mayur Matani
mayur.matani@icicisecurities.com
Utkarsh Tathagath
utkarsh.tathagath@icicisecurities.com

Page 2

Variance analysis
Q1FY15 Q1FY15E Q1FY14 YoY (%) Q4FY14 QoQ (%) Comments
Total Revenues 15,743.6 15,058.8 15,268.7 3.1 19,706.8 -20.1 Higher than estimated throughput led to higher revenues
Raw materials costs 15,682.9 14,555.6 14,939.9 5.0 18,557.4 -15.5
Employees Cost 58.0 60.0 50.2 15.6 57.3 1.3
Other Expenses 150.1 100.0 624.2 -76.0 149.8 0.2
Total Expenditure 15,891.0 14,715.6 15,614.3 1.8 18,764.5 -15.3
EBITDA -147.5 343.2 -345.6 -57.3 942.3 -115.7
EBITDA margins (%) -0.9 2.3 -2.3 133 bps 4.8 -572 bps Lower margins due to lower GRM of $ 0.7/barrel (our estimate $3.6/barrel)
Depreciation 94.6 218.1 168.8 -44.0 177.1 -46.6 Lower depriciation due to change in accounting policy
EBIT -242.0 125.2 -514.4 -52.9 765.2 -131.6
Interest 53.1 108.2 77.9 -31.8 58.2 -8.8
Other Income 221.1 28.0 26.5 733.0 157.2 40.6
Extra Ordinary Item 0.0 0.0 111.8 NA 0.0 NA
PBT -74.1 45.0 -454.0 -83.7 864.2 -108.6
Total Tax -38.0 13.9 0.0 NA -202.8 NA
PAT -36.1 31.0 -454.0 -92.0 1,067.0 -103.4
Key Metrics
Exchange Rate (US$/|) 59.8 59.8 56.0 6.8 61.8 -3.2
Oil Throughput (mmt) 3.2 3.1 3.3 -2.1 3.8 -16.7
GRM (US$/barrel) 0.7 3.6 2.9 -77.6 3.2 -79.2
GRMs were lower due to increased fuel and loss in scenario of part
commissioning of refinery expansion project

Source: Company, ICICIdirect.com Research

Change in estimates
(| Crore) Old New % Change Old New % Change Comments
Revenue 71,128.6 71,528.7 0.6 75,345.8 75,345.8 0.0
EBITDA 2,294.5 1,222.1 -46.7 3,088.5 3,088.5 0.0
FY15E EBITDA changed due to lower GRM expected on account of part
commissioning of refinery expansion project
EBITDA Margin (%) 3.2 3.2 7 bps 4.1 4.1 0 bps
PAT 677.2 558.9 -17.5 1,112.8 1,580.8 42.0
EPS (|) 3.9 3.2 -17.5 6.3 9.0 42.0
FY15E FY16E


Assumptions
FY13 FY14 FY15E FY16E FY15E FY16E
Exchange Rate (US$/|) 54.4 60.6 60.2 60.0 60.0 60.0
Oil Throughput (mmt) 14.4 14.6 14.6 15.2 14.5 15.2
GRM (US$/barrel) 2.5 2.7 3.1 5.7 4.6 5.7
Decrease in FY15E GRM due to fuel and loss in scenario of commissioning of
expansion projects
Comments
Current Earlier

Source: Company, ICICIdirect.com Research,

Page 3
Company Analysis

Volumes scenario not expected to improve in the near term
MRPL Phase III is in the final stage of completion and has achieved an
overall progress of 99.74% as on July 15, 2014. This refinery expansion &
upgradation project at Mangalore includes: - (1) capacity addition of 3
MMTPA and upgradation project (2) polypropylene unit and (3) single
point mooring (SPM) facility. The SPM facility got commissioned in
August 2013, which saves the freight cost for the company. During
Q1FY15, the company commissioned the delayed coker unit (DCU), Coker
hydro treater unit & two out of three SRU units. The PFCC (converts
vacuum gasoil to propylene) and one train of SRU are expected to be
commissioned in August 2014. The physical progress of the
Polypropylene unit is 96.3% and is expected to be commissioned by
October 2014 from the earlier date of July 2014. Higher complexity on
commissioning of Phase III project will lead to an increase in distillate
yield from 76.5% to 80.1%, better capability to handle heavier & sourer
crude and production of higher margin value-added products.

Post completion of Phase III project, the refinery will produce higher
proportion of light & middle distillates, which trade at a higher premium to
crude as compared to heavy distillates. We expect the proportion of light
distillates to increase from 21% to 23.6% and the proportion of middle
distillates to increase from 55.5% to 56.5%, thus improving the distillate
yield from 76.5% to 80.1%. Hence, capacity expansion and upgradation
projects will contribute incremental US$1.5/barrel to refining margins.

These units, once commissioned, will produce higher margin yielding
products that will contribute US$1.5-2/barrel to refining margins.
Additionally, MRPL saves on freight cost due to the single point mooring
facility, commissioned in August 2013. The benefits that accrue to MRPL
on account of the SPM facility increases the GRMs by ~US$0.5 per barrel
however the loss of fuel in part commissioning of new project has got the
GRMs down drastically. The loss due to this need to be ascertained for
the future quarters as well. We have estimated GRMs of US$ 3.1 per
barrel & US$ 5.7 per barrel for FY15E & FY16E, respectively.

Exhibit 1: Major units of Phase III refinery project
Units Capacity
Crude & Vaccum Distillation Unit (CDU/VDU) 3 MMTPA
Petrochemical Fluidised Catalytic Cracking (PFCC) 2.2 MMTPA
Delayed Coker Unit (DCU) 3 MMTPA
Diesel Hydrotreating Unit (DHDT) 3.7 MMTPA
Coker Heavy Gas Oil Hydro Treater Unit (CHT) 0.65 MMTPA
Polypropylene unit 0.44 MMTPA
Hydrogen Generation Unit (HGU) 70 KTPA
3 Sulphur Recovery Unit (SRU) 185 TPD
Captive Power Plant (CPP) 116 MW


Page 4
Higher complexity to boost GRMs to US$5.7/barrel in FY16E
The commissioning of CDU/VDU units had already increased MRPLs
capacity from 11.8 MMTPA to 15 MMTPA. However, the throughput is
expected to increase from 14.6 MMTPA in FY14 to 15.2 MMTPA in FY16E
post the commissioning of all secondary units. Given the improvement in
complexity, better distillate yield and access to cheaper crude oil, we
expect MRPLs refining margins to increase from US$2.7/barrel in FY14 to
US$3.1/barrel and US$5.7/barrel in FY15E and FY16E, respectively.

Exhibit 2: MRPLs throughput trend
12.8
14.4 14.6 14.6
15.2
0
4
8
12
16
20
FY12 FY13 FY14 FY15E FY16E
m
m
t
0
20
40
60
80
100
120
%
Crude oil throughput Capacity utilisation


Exhibit 3: MRPLs refining margins trend
5.6 5.7
2.5 2.7
3.1
0.0
1.5
3.0
4.5
6.0
7.5
U
S
$

p
e
r

b
a
r
r
e
l


Page 5
Profitability sensitive to refining margins
MRPLs earnings are highly correlated to refining margins. PAT for the
current quarter also declined due to lower GRMs on increased fuel and
loss in scenario of part commissioning of refinery expansion. This loss
may continue for the coming quarters till the phase III expansion
completes and stabilise. However, with the commencement of operations
of the secondary units under Phase III expansion & up gradation project,
we expect the operational efficiencies to improve leading to increase in
GRMs. We expect the PAT to increase from | 601.2 crore in FY14 to a
profit of | 1580.8 crore in FY16E.

Exhibit 4: Trend in net profit
908.6
-756.9
601.2
558.9
1580.8
-800
-400
0
400
800
1200
1600
|

C
r
o
r
e


Page 6

Outlook & Valuation
Overall, MRPL has lower policy leverage and lowest gearing on the
balance sheet amongst PSU refineries with the commencement of
operations at all secondary processing units, operational efficiencies will
kick in that will boost refining margins to US$ 3.1/barrel and US$5.7/barrel
in FY15E and FY16E, respectively. We expect the company to report net
profit of | 558.9 crore and | 1580.8 crore in FY15E and FY16E,
respectively, against | 601.2 crore in FY14. The stock is trading at 1.2x
FY16E book value against a historical six year average of 1.7x. On an
EV/EBITDA basis, it is trading at 4.8x FY16E EBITDA. We value the stock
at 5.5x FY16E EV/EBITDA multiple to arrive at a target price of | 73.

Exhibit 5: EV/EBITDA
0
5
10
15
20
25
M
a
r
-
0
7
S
e
p
-
0
7
M
a
r
-
0
8
S
e
p
-
0
8
M
a
r
-
0
9
S
e
p
-
0
9
M
a
r
-
1
0
S
e
p
-
1
0
M
a
r
-
1
1
S
e
p
-
1
1
M
a
r
-
1
2
S
e
p
-
1
2
M
a
r
-
1
3
S
e
p
-
1
3
M
a
r
-
1
4
E
V
/
E
B
I
T
D
A

(
x
)
EV/EBITDA Average

Source: ICICIdirect.com Research

Page 7
Company snapshot
Target Price: 73
0
20
40
60
80
100
120
140
J
a
n
-
0
8
A
p
r
-
0
8
J
u
l
-
0
8
O
c
t
-
0
8
J
a
n
-
0
9
A
p
r
-
0
9
J
u
l
-
0
9
O
c
t
-
0
9
J
a
n
-
1
0
A
p
r
-
1
0
J
u
l
-
1
0
O
c
t
-
1
0
J
a
n
-
1
1
A
p
r
-
1
1
J
u
l
-
1
1
O
c
t
-
1
1
J
a
n
-
1
2
A
p
r
-
1
2
J
u
l
-
1
2
O
c
t
-
1
2
J
a
n
-
1
3
A
p
r
-
1
3
J
u
l
-
1
3
O
c
t
-
1
3
J
a
n
-
1
4
A
p
r
-
1
4
J
u
l
-
1
4
O
c
t
-
1
4
J
a
n
-
1
5
A
p
r
-
1
5
J
u
l
-
1
5

Source: Bloomberg, Company, ICICIdirect.com Research

Key events
Date Event
May-08 MRPL announces a dividend of 12% after PAT increase from | 525.5 crore to | 1272.23 crore in FY07-08
Dec-09 Plans to raise | 4000 crore forex loan
Dec-09 Borrows | 10000 crore from parent company to boost capacity by 51% and build a petrochemical plant
Jan-11 Iran supply concerns lead to uncertainty as MRPL gets majority of its supply from Iran
Dec-11 Plans to raise US$500 million loan for expansion of Phase 3 refinery
Mar-12 Closes US$250 million expansion loan to expand its capacity at its Mangalore refinery
Apr-12 Shuts its 300,000 barrels per day plant due to water shortage and defers its shipments
May-13 Posts loss of | 757 crore in FY13 mainly on account of high interest payments and exchange losses
Dec-13 Halts fuel export after March as insurance companies say refineries processing oil will no longer be covered due to sanctions from Western nations
Apr-14 Plans US$1.4 billion expansion at its facility in western India as its margins rise to meet growing fuel demand


Top 10 Shareholders Shareholding Pattern
Rank Name Latest Filing Date % O/S Position (m) Change (m)
1 Oil and Natural Gas Corporation Ltd 30-Jun-14 71.63 1,255.4 0.0
2 Hindustan Petroleum Corp Ltd 30-Jun-14 16.96 297.2 0.0
3 Life Insurance Corporation of India 30-Jun-14 1.47 25.7 0.0
4 IDFC Asset Management Company Private Limited 30-Jun-14 0.44 7.6 2.8
5 The Vanguard Group, Inc. 30-Jun-14 0.29 5.2 0.1
6 Dimensional Fund Advisors, L.P. 30-Jun-14 0.14 2.5 0.0
7 DSP BlackRock Investment Managers Pvt. Ltd. 30-Jun-14 0.02 0.3 -0.2
8 Baroda Pioneer Asset Management Company Limited 30-Jun-14 0.02 0.3 -0.1
9 Franklin Templeton Asset Management (India) Pvt. Ltd. 31-May-13 0.02 0.3 -1.0
10 Legal & General Investment Management Ltd. 31-May-14 0.00 0.0 0.0
(in %) Jun-13 Sep-13 Dec-13 Mar-14 Jun-14
Promoter 88.6 88.6 88.6 88.6 88.6
FII 0.6 0.5 0.5 0.5 0.6
DII 2.6 2.8 2.9 3.1 3.1
Others 8.2 8.2 8.0 7.9 7.8
Source: Reuters, ICICIdirect.com Research

Recent Activity
Investor name Value Shares Investor name Value Shares
IDFC Asset Management Company Private Limited 3.38m 2.82m Mellon Capital Management Corporation -0.89m -1.31m
Franklin Templeton Asset Management (India) Pvt. Ltd. -0.88m -0.96m
ICICI Prudential Asset Management Co. Ltd. -0.84m -0.85m
Principal PNB Asset Management Company Ltd. -0.73m -0.80m
Birla Sun Life Asset Management Company Ltd. -0.33m -0.30m
Buys Sells

Source: Reuters, ICICIdirect.com Research

Page 8

.
Financial summary

Profit and loss statement | Crore
(Year-end March) FY13 FY14 FY15E FY16E
Revenue 66,086.2 72,590.6 71,528.7 75,345.8
Growth (%) 22.2 9.8 -1.5 5.3
(Inc)/(Dec) in stock in trade -1116.2 -674.1 201.6 0.0
Raw material Costs 65400.2 70852.5 69367.0 71532.8
Employee Costs 184.6 215.5 238.0 260.0
Ex. Duty & Sales Tax 0.0 0.0 0.0 0.0
Other Expenditure 1299.6 1179.5 500.0 464.5
Op. Expenditure 65768.1 71573.4 70306.6 72257.3
EBITDA 318.0 1,017.2 1,222.1 3,088.5
Growth (%) -80.6 219.8 20.1 152.7
Depreciation 604.4 706.4 486.2 564.3
EBIT -286.4 310.8 735.9 2524.2
Interest 328.6 321.4 312.7 441.3
Other Income 138.1 420.4 365.1 208.0
PBT -476.9 409.7 788.2 2290.9
Growth (%) -136.1 -185.9 92.4 190.6
Tax 280.1 -191.5 229.4 710.2
Reported PAT -756.9 601.2 558.9 1,580.8
Growth (%) -183.3 -179.4 -7.0 182.9
EPS -4.3 3.4 3.2 9.0


Cash flow statement | Crore
Profit after Tax -756.9 601.2 558.9 1,580.8
Less: Dividend Paid 0.0 0.0 244.4 244.4
Add: Depreciation 604.4 706.4 486.2 564.3
Add: Others 281.2 -264.1 150.0 150.0
Cash Profit 128.7 1,043.5 950.7 2,050.6
Increase/(Decrease) in CL -202.7 1,440.4 9.1 986.9
(Increase)/Decrease in CA 984.8 -895.9 321.6 -467.0
CF from Operating Activities 910.9 1588.1 1281.4 2570.5
Purchase of Fixed Assets 2,790.6 1,722.3 2,334.0 200.0
(Inc)/Dec in Investments 27.3 0.0 0.0 0.0
Others 0.0 0.0 0.0 0.0
CF from Investing Activities -2,763.3 -1,722.3 -2,334.0 -200.0
Inc/(Dec) in Loan Funds 1,228.1 1,850.0 -350.0 -2,250.0
Inc/(Dec) in Sh. Cap. & Res. -4.6 0.0 0.0 0.0
Others 0.0 0.0 0.0 0.0
CF from financing activities 1,223.5 1,850.0 -350.0 -2,250.0
Change in cash Eq. -628.9 1,715.7 -1,402.6 120.5
Op. Cash and cash Eq. 2,234.7 1,605.8 3,321.5 1,919.0
Cl. Cash and cash Eq. 1,605.8 3,321.5 1,919.0 2,039.5


Balance sheet | Crore
Source of Funds
Equity Capital 1,752.7 1,752.7 1,752.7 1,752.7
Preference capital 0.0 0.0 0.0 0.0
Reserves & Surplus 4,715.0 5,316.2 5,630.7 6,967.0
Shareholder's Fund 6,467.7 7,068.9 7,383.3 8,719.7
Loan Funds 6,979.8 8,829.8 8,479.8 6,229.8
Deferred Tax Liability 734.3 470.3 620.3 770.3
Minority Interest 0.0 0.0 0.0 0.0
Source of Funds 14,181.8 16,368.9 16,483.4 15,719.8
Application of Funds
Gross Block 11,338.5 16,373.5 22,408.5 22,958.5
Less: Acc. Depreciation 5,557.8 6,286.9 6,769.0 7,333.3
Net Block 5,780.7 10,086.6 15,639.4 15,625.2
Capital WIP 7,554.5 4,264.5 559.5 209.5
Total Fixed Assets 13,335.2 14,351.1 16,198.9 15,834.6
Investments 15.0 15.0 15.0 15.0
Inventories 6,715.3 7,358.5 7,250.9 7,637.8
Debtor 3,972.7 4,375.3 4,311.3 4,541.4
Cash 1,605.8 3,321.5 1,919.0 2,039.5
Loan & Advance, Other CA 1,057.3 907.3 757.3 607.3
Total Current assets 13,351.0 15,962.6 14,238.4 14,825.9
Current Liabilities 12,373.9 13,921.5 13,717.8 14,449.9
Provisions 145.5 38.3 251.1 505.9
Total CL and Provisions 12,519.4 13,959.8 13,968.9 14,955.8
Net Working Capital 831.6 2,002.9 269.5 -129.9
Miscellaneous expense 0.0 0.0 0.0 0.0
Application of Funds 14,181.8 16,368.9 16,483.4 15,719.8

Key ratios
Per share data (|)
Book Value 36.9 40.3 42.1 49.8
Cash per share 9.2 19.0 10.9 11.6
EPS -4.3 3.4 3.2 9.0
Cash EPS -0.9 7.5 6.0 12.2
DPS 0.0 0.0 1.2 1.2
Profitability & Operating Ratios
EBITDA Margin (%) 0.5 1.4 1.7 4.1
PAT Margin (%) -1.1 0.8 0.8 2.1
Fixed Asset Turnover (x) 5.0 5.1 4.4 4.8
Inventory Turnover (Days) 36.9 37.0 37.0 37.0
Debtor (Days) 21.9 22.0 22.0 22.0
Current Liabilities (Days) 69.1 70.0 70.0 70.0
Return Ratios (%)
RoE -11.7 8.5 7.6 18.1
RoCE -2.1 2.0 4.6 16.9
RoIC -2.4 2.5 5.3 19.6
Valuation Ratios (x)
PE -14.1 17.8 19.1 6.8
Price to Book Value 1.7 1.5 1.4 1.2
EV/EBITDA 50.5 15.9 14.1 4.8
EV/Sales 0.2 0.2 0.2 0.2
Leverage & Solvency Ratios
Debt to equity (x) 1.1 1.2 1.1 0.7
Interest Coverage (x) -0.9 1.0 2.4 5.7
Debt to EBITDA (x) 21.9 8.7 6.9 2.0
Current Ratio 1.1 1.1 1.0 1.0
Quick ratio 0.5 0.6 0.5 0.5

Page 9

ICICIdirect.com coverage universe (Oil & Gas)
CMP M Cap
(|) TP(|) Rating (| Cr) FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E
Cairn India (CAIIND) 318 350 Hold 61,452 65.2 44.3 51.4 5.0 7.2 6.2 4.4 4.6 4.2 19.8 15.1 14.5 21.6 13.1 13.6
GAIL (India) (GAIL) 407 551 Buy 51,627 31.7 31.8 35.5 12.8 12.8 11.5 8.9 8.7 8.1 16.9 14.7 15.4 16.6 15.1 15.2
Gujarat Gas (GUJGAS) 434 395 Hold 5,566 32.6 30.4 31.0 13.3 14.3 14.0 8.9 9.8 9.3 42.1 34.5 32.5 33.6 27.1 24.5
Hindustan Petroleum (HINPET) 403 448 Buy 13,662 51.2 43.3 52.0 7.9 9.8 8.1 8.1 8.8 7.1 6.8 5.2 6.4 11.7 9.3 10.4
Indian Oil Corporation (INDOIL) 444 341 Hold 107,692 20.6 28.9 21.3 21.5 15.3 20.8 7.8 6.8 7.0 5.7 6.9 6.4 8.2 10.7 7.6
Indraprastha Gas (INDGAS) 380 390 Hold 5,199 25.7 32.0 34.9 14.8 11.9 10.9 6.8 6.1 5.5 27.3 30.3 27.8 20.4 21.1 19.5
Mangalore Refinery (MRPL) 61 73 Buy 10,691 3.4 3.2 9.0 17.8 19.1 6.8 15.9 14.1 4.8 2.0 4.6 16.9 8.5 7.6 18.1
Oil India Limited (OILIND) 570 782 Buy 34,237 59.7 49.6 58.0 9.5 11.5 9.8 5.0 7.4 5.9 18.5 9.4 11.9 18.7 14.4 15.5
ONGC (ONGC) 393 533 Buy 357,622 28.3 31.0 30.4 14.8 13.5 13.8 6.3 6.5 6.2 19.7 16.6 17.4 15.7 15.8 14.3
Petronet LNG (PETLNG) 180 200 Buy 13,500 9.5 10.5 13.7 19.0 17.2 13.2 10.9 9.8 8.1 13.0 12.5 14.6 14.3 14.1 16.1
RoCE (%) RoE (%)
Sector / Company
EPS (|) P/E (x) EV/EBITDA (x)

Page 10

RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns
ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.

Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;

Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com

ICICIdirect.com Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai 400 093

research@icicidirect.com

ANALYST CERTIFICATION
We /I, Mayur Matani, MBA; Utkarsh Tathagath, MBA research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately
reflect our personal views about any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific
recommendation(s) or view(s) in this report. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc.
Disclosures:
ICICI Securities Limited (ICICI Securities) and its affiliates are a full-service, integrated investment banking, investment management and brokerage and financing group. We along with affiliates are leading
underwriter of securities and participate in virtually all securities trading markets in India. We and our affiliates have investment banking and other business relationship with a significant percentage of
companies covered by our Investment Research Department. Our research professionals provide important input into our investment banking and other business selection processes. ICICI Securities
generally prohibits its analysts, persons reporting to analysts and their dependent family members from maintaining a financial interest in the securities or derivatives of any companies that the analysts
cover.
The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and
meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without
prior written consent of ICICI Securities. While we would endeavour to update the information herein on reasonable basis, ICICI Securities, its subsidiaries and associated companies, their directors and
employees (ICICI Securities and affiliates) are under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities
from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities
policies, in circumstances where ICICI Securities is acting in an advisory capacity to this company, or in certain other circumstances.
This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This
report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their
receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific
circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate
the investment risks. The value and return of investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities and affiliates accept no liabilities for any
loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the
risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to
change without notice.
ICICI Securities and its affiliates might have managed or co-managed a public offering for the subject company in the preceding twelve months. ICICI Securities and affiliates might have received
compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of public offerings, corporate finance, investment
banking or other advisory services in a merger or specific transaction. It is confirmed that Mayur Matani MBA; Utkarsh Tathagath, MBA research analysts and the authors of this report have not received
any compensation from the companies mentioned in the report in the preceding twelve months. Our research professionals are paid in part based on the profitability of ICICI Securities, which include
earnings from Investment Banking and other business.
ICICI Securities or its subsidiaries collectively do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the
research report.
It is confirmed that Mayur Matani, MBA; Utkarsh Tathagath, MBA research analysts and the authors of this report or any of their family members does not serve as an officer, director or advisory board
member of the companies mentioned in the report.
ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. ICICI Securities and affiliates may act upon or make use
of information contained in the report prior to the publication thereof.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution,
publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities
described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and
to observe such restriction.

Mangalore Refinery (MRPL) : Phase III Near Completion

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mangalore Refinery (MRPL) : Phase III Near Completion

Uploaded by

Copyright:

Available Formats

August 12, 2014

ICICI Securities Ltd | Retail Equity Research

You might also like