MRPL was beset by buying today on expectations that the company is likely to reduce losses hugely in the current fiscal.

By 10:17 IST, the scrip of Mangalore Refinery and Petrochemicals (MRPL) sprang forth 19.13% to Rs 16.50. It recorded volumes of over 8.15 lakh shares on BSE by then. The scrip of the standalone refining PSU has risen a solid 65% from Rs 10 on 8 May 2003.

The scrip is currently being deemed as attractively valued in the light of expectations that the company may stage a turnaround after the change in management control (takeover by ONGC). Only yesterday, the company said that it expects to reduce its losses sharply in the current year following a restructuring exercise. According to reports, the company expects its net loss to decline to Rs 195 crore ($41.4 million) in FY 2003-04 from an estimated Rs 419 crore in the year ended 31 March 2003.

There's also speculation that ONGC (the recent acquirer) will undertake a buy-back of shares. But some analysts are ruling out that possibility.

The company expects to benefit immensely from the crude that will be supplied to it from the Sudan Greater Nile Valley Project. In fact, the first shipment (80,000 metric tonnes of Nile Blend) of crude from Sudan arrived at Mangalore, where the refinery is situated, just yesterday. Already, MRPL, over the last few months, has seen capacity utilisation go up from 40% to 90%. With the supply of crude from Sudan, the company could reach 100% capacity utilisation.

The acquisition of MRPL by ONGC is mutually beneficial for both companies, it is being reckoned . It will enable ONGC to set up retail outlets under the marketing rights for transportation fuels. ONGC has been authorised to set up 600 petrol stations in four states.

For the third quarter ended 31 December 2002, MRPL posted losses of Rs 130.3 crore, compared to a loss of Rs 36.80 crore in the corresponding period of the previous year. Net sales increased by 89.8% to Rs 2,316.11 crore from Rs 1,220.50 crore in DQ 2001.

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