PP Upadhya, MD, MRPL says the company performed well in the fourth quarter on account of improved inventory levels.

Mangalore Refinery and Petrochemicals (MRPL) has turned profitable with the net at Rs 1,067 crore in the quarter ended January-March of FY14 as against loss of Rs 62 crore in corresponding quarter of last fiscal, driven by forex gain, higher other income and better operational performance.

The company’s gross refining margins (GRMs) have improved to about USD 3 per barrel versus 1.98 earlier. PP Upadhya, MD, MRPL, expects margins to go up at least by USD 2 per barrel in the first half of FY15.

He says the company performed well in the fourth quarter on account of improved inventory levels.

Sonia: This time around your gross refining margins (GRMs) have improved to about USD 3 per barrel versus 1.98 earlier, what kind of GRMs can MRPL sustain in the first half over FY15?
A: Our phase-III expansion project is coming to an end with the Coker commissioning in April. First half, we expect the margins to go up at least by USD 2.

Nigel: With regards to your GRMs itself, your high inventory led to some kind of gains, close to around USD 5 billion, could you take us through that figure and what is your current inventory?
A: Capacity has also gone up and since we have won most of the crude is imported crude. So we have to give that operating inventory of the crude oil because earlier our operating level was low, now since our operating levels are high and three different units are running, so we have to keep this inventory reasonable for a sustained operation.

Sonia: What kind of trajectory can we expect from MRPL on topline? You told us about the improvement in margins but on the topline what could the revenue run rate be?
A: It depends upon crude oil prices and keeping the same and what is now at the present level - the quarterly turnover of about more than Rs 20,000 crore is expected.

Nigel: There is a big forex gain that you have seen, the rupee has shown further strength, could you take us through what is the figure we can foresee going ahead and also with regard to your long-term as well as your short-term debt, there has been a rejig of sorts, could you take us through that one as well?
A: In this particular quarter we got a good gain on foreign exchange because the exchange rate came down to 59.92 on March 29. That has given us about more than 500 crore improvement. Today exchange rate has come down to 58, each dollar improvement is giving us benefit.