Multibagger Stocks: This legendary PSU stock Shares have made huge profits for investors. It has turned from loss to profit on an annual basis in the December 2023 quarter but still domestic brokerage firm Motilal Oswal has given it a sell rating. According to brokerage, it may fall by 21 percent from the current level. Know the reason for this trend of brokerage
Shares of Refinery and Petrochemicals (Mangalore Refinery and Petrochemicals) have generated huge gains for investors. It turned to profit from a loss on an annualized basis in the December 2023 quarter but still has a sell rating from domestic brokerage firm Motilal Oswal. According to the brokerage, it could fall 21 percent from current levels. Its shares closed down 2.37 percent at Rs 170.90 (Mangalore Refinery share price) on the BSE today.
Why did the stocks brokerage give a sell rating?
The Mangalore refinery swung to profit from an annual loss in the December quarter but fell short of expectations, according to brokerages. Its EBITDA fell short of brokerage estimates. Given its poor performance in the December quarter, the brokerage cut its FY2024 EBITDA estimates by 7 percent and net profit estimates by 11 percent. According to the brokerage, the stock is currently valued at 2.2 times its estimated book value in 2025, which is higher than its long-term average of 1.3 times. Considering all these factors, the brokerage has given it a Sell rating with a target price of Rs.135.
How was the December quarter for Mangalore Refinery?
Mangalore Refinery posted a consolidated net profit of Rs 392.08 crore in the December quarter. Whereas it posted a loss of Rs 194.95 crore in the same quarter of last financial year i.e. October-December 2022. However, the company’s consolidated revenue fell from Rs 30,966.16 crore to Rs 28,383.41 crore during the period.
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How did the shares return?
Shares of Mangalore Refineries and Chemicals were at Rs 23.60 on April 3, 2020. Now it is at Rs 170.90, which means it has raised investors’ capital more than seven times in less than four years. Talking about the movement of the stock in the last one year, it touched a one-year low of Rs 49.20 last year on February 28, 2023. From this level, it jumped 278 percent in 11 months and touched a record high of Rs 185.85 on January 15, 2024. However, the share’s rise has stalled, falling 8 percent from this level.
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