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Strong Middle-Distillate Spreads Defy Inventory Drags

MRPL delivered robust Q1FY27 revenue growth of 111.3% YoY to INR 382 Bn, with Adjusted PAT for Q1FY27 was INR 4,739 Mn against loss of INR 2,707 Mn in Q1FY26. The growth is driven by a robust product pricing and core middledistillate strength. While transient inventory headwinds compressed EBITDA margin by 166 bps YoY to 3.4%, operational flexibility remained structurally intact. Domestic throughput expanded to 4.43 MMT, outpacing gasoline-heavy regional peers via a favourable diesel yield arbitrage backed by a high 11.7 Nelson Complexity Index. Elevated product spreads were further supported by continuing global capacity migration away from Europe and the structural removal of Chinese swing supply. We have revised up our FY27E/28E Revenue/EBITDA by 5%/2%/5% on the back of stronger product pricing as compared to our previous assumptions. However, we maintain our TP of INR215/sh and BUY rating.

Furthermore, MRPL achieved significant milestones in its downstream and green energy diversification strategies. The company secured critical PNGRB authorisation for its Bengaluru ATF pipeline network. Crucially, MRPL advanced its green transition by obtaining the prestigious ISCC CORSIA certification for coprocessing used cooking oil into Sustainable Aviation Fuel (SAF).

Revenue beat while EBITDA trails to CIE estimates

* Revenue for Q1FY27 was up by 120.4% YoY and up by 59.7% QoQ at INR 382 Bn (vs CIE est. INR 307 Bn)

* EBIDTA for Q1FY27 was up by 633.7% YoY and down by 26.1% QoQ at INR 13,176 Mn (vs CIE est. INR 13,708 Mn). The EBITDA Margin stood at 3.4%, up by 241 bps YoY (vs CIE est. of 4.5%)

* The Adjusted PAT for Q1FY27 was INR 4,739 Mn against loss of INR 2,707 Mn in Q1FY26. The Adjusted PAT for Q1FY27 was up 305.4% QoQ at INR 4,739 Mn (vs CIE est. INR 2,129 Mn). Adjusted PAT Margin improved 403 bps YoY, reaching 2.5% (vs CIE est. 0.7%)

Strategic infrastructure and marketing expansion

MRPL has significantly enhanced its logistical capabilities and market penetration by securing pivotal pipeline authorisation, including the ATF pipeline to Bengaluru Airport. The initiation of product loading across new multi-state terminals and depots, combined with strategic tankage lease agreements at critical domestic ports, significantly strengthens the company’s supply chain resilience. This structural footprint expansion positions the refiner to seamlessly capture growing regional fuel demand and optimise its product distribution matrix

Pioneering Sustainable Aviation Fuel Capabilities

The company has achieved a critical operational milestone by successfully securing the prestigious ISCC CORSIA international sustainability certification for the co-processing of used cooking oil. This major step forward in its Sustainable Aviation Fuel journey positions the organisation at the forefront of the domestic refining industry’s green transition. By establishing robust, verified early-mover capabilities which comply with stringent global aviation carbon reduction frameworks, the refiner structurally pre-empts long-term regulatory risks.

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