MRPL is being deemed as a value pick as the market expects a strong turnaround by the company in the wake of its recent acquisition by IOC.

In fact, such was the optimism on the counter today that it hit the 20% upper circuit to a new 52-week high of Rs 19.90 in early trades. The scrip came off that level later though, but is still above its Friday's close by 8.43% at Rs 18. Solid volumes of over 12.7 lakh shares were registered in the stock on BSE by 10:58 IST.

Profit booking manifested on the counter at its peak level today. But the scrip has been rising at a scorching pace of late. Between 8 and 16 May, MRPL had risen 66% to Rs 16.60 from Rs 10.

The scrip is currently being deemed as attractively valued in the light of expectations that the company may stage a turnaround following the change in management control (takeover by ONGC). Last week, the company said that it expects to reduce losses sharply in the current year following a restructuring exercise. According to reports, the company expects 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 has already arrived at Mangalore, where the refinery is situated. 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.