An oil refinery in India. (Photographer: Adeel Halim/Bloomberg)

MRPL Says $8.25 Per Barrel Refining Margins ‘Satisfactory’

Mangalore Refinery and Petrochemicals Ltd. outstripped analysts' estimates in the January to March quarter with an over three-fold jump in profit and a 10 percent growth in its refining margin.

Net profit soared 242 percent to Rs 1,942.4 crore from the quarter ended December, according to its stock exchange filing. Analysts tracked by Bloomberg had pegged the bottomline at Rs Rs 662.1 crore. Revenue increased 15 percent to 18,099.5 crore, surpassing analysts' estimates of Rs 13,386.2 crore.

Operating income grew 35.4 percent to Rs 1,554 crore while operating margin expanded 130 basis points to 8.6 percent.

The gross refining margin of the Oil and Natural Gas Corporation Ltd. subsidiary was flat at $8.25 per barrel against $7.43 per barrel in the December-ended quarter. GRM is the difference between the price of crude oil and the price at which a refiner sells its product.

The refining margins are satisfactory, Chairman Dinesh Sarraf told BloombergQuint, adding that the government-owned firm expects margins to remain healthy in the financial year 2017-18.

The company also settled a $2.5 billion payment to National Iranian Oil Company during the financial year for procuring crude.

Mangalore Refinery has two major projects in the pipeline, one of which is the planned upgrade to Bharat Stage-VI compliant petroleum products by April 2020, as mandated by the Supreme Court. The other, Saraff said, was to expand capacity to 25 million tonne per annum from 15 million tonne per annum currently.

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