MRPL, Chennai Petroleum Shares Surge Over 16% Amid Crude Price Trends Shares of Mangalore Refinery and Petrochemicals Ltd (MRPL) and Chennai Petroleum Corporation Ltd rose sharply in Monday’s trading session, with MRPL’s stock climbing 16.18% to close at Rs 206.80 and Chennai Petroleum gaining 7.70% to Rs 988.60. The surge was attributed to rising crude oil prices, which are expected to benefit standalone refiners like these companies. Elara Capital, in a recent report, highlighted that refiners operating independently would see significant gains as crude prices increase. The brokerage noted that the Gross Refining Margin (GRM) for the industry could rise by approximately $5 per barrel for every $10 per barrel increase in crude oil prices. This is because such companies do not bear the burden of retail fuel losses, giving them a competitive edge. The report also pointed out that MRPL and Chennai Petroleum could experience substantial growth in their EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) but warned of potential policy risks. Elara stated that while near-term earnings could be strong, sustained high GRMs might draw regulatory attention. If refining margins remain elevated for an extended period, the government could impose windfall duties or other interventions to curb excessive profits. This would introduce uncertainty, as policy actions could offset the benefits of higher margins. Additionally, the brokerage emphasized that oil marketing companies (OMCs) are disproportionately affected by high crude prices. Higher GRMs can partially offset losses from retail margins and rising LPG subsidies, but the impact varies among OMCs.#brent_crude #strait_of_hormuz #mrpl #chennai_petroleum #elara_capital
