⚡ Flash Summary

National Refinery Limited (NRL) held a corporate briefing session for 2025, highlighting its position as the only lube refinery in Pakistan and its EURO-V compliant HSD production. The company’s crude oil refining capacity stands at 70,000 Bbl per day or 23.1 million Bbls per annum. Key challenges include volatile refining margins, declining product prices, smuggling, increased utility costs, and rupee devaluation, which resulted in a Rs. 1.9 billion exchange loss. NRL is undertaking upgrade projects, focusing on HSE, throughput, HSD production, and exploring export markets for wax and LBO variants.

📌 Key Takeaways

• Established in 1963 as a Public Limited Company. 🏢
• Refinery Complex includes Lube Refinery (1966), Fuel Refinery (1977), and Lube II Refinery (1985). 🏭
• Crude oil refining capacity: 70,000 Bbl/day / 23.1 million Bbls/annum (2.3 MTA). 🛢️
• Major Shareholders: Pakistan Oilfields Limited (25%), Attock Refinery Limited (25%), Islamic Development Bank (15%). 🤝
• Long-term credit rating: AA. 📊
• Only lube refinery in the country. 🥇
• Only refinery producing EURO-V compliant HSD. ⛽
• Significant asset value: Plant (US$ 1.5 Bln), Land (US$ 165 Million). 💰
• Gross Refinery Margins (Jul’24-Jun’25): Rs. 12,150 million vs. Rs. 8,428 million (Jul’23-Jun’24). 📈
• Manufacturing Expenses (Jul’24-Jun’25): Rs. 18,384 million vs. Rs. 16,196 million (Jul’23-Jun’24). 🏭
• Gross Loss (Jul’24-Jun’25): Rs. (6,234) million vs. Rs. (7,768) million (Jul’23-Jun’24). 📉
• Loss after tax (Jul’24-Jun’25): Rs. (14,867) million vs. Rs. (15,790) million (Jul’23-Jun’24). 💸
• Sales Volume (Jul’24-Jun’25): 1,612,414 M.Tons vs. 1,383,291 M.Tons (Jul’23-Jun’24). 🚚
• Rupee devaluation loss: Rs. 1.9 billion. currency_exchange
• Undertaking upgrade projects including Hydrocracker and CCR unit. 🛠️

🎯 Investment Thesis

Based on the current financial performance and prevailing risks, a HOLD recommendation is appropriate. While the company shows some improvement in gross margins, significant losses persist due to various market and economic factors. A more positive outlook would depend on successful completion of upgrade projects, improved refining margins, and stability in the macroeconomic environment. The company needs to address the volatility in rupee dollar parity exchange loss