$ cat infile
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = P0; /* if next shift_port is P0 I need to replace this with M0; and next shift_port's P0; with 00;
    port3       = 0;
    reset       = 1;
   }
  W wf_cyc;
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = P0;
    port3       = 0;
    reset       = 1;
   }
  Macro "Inputs" { 
    test_ip =
        110111010110
  }

  W wf_cyc;
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = 00;
    port3       = 0;
    reset       = 1;
  }
  W wf_cyc;
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = 00; 
    port3       = 0;
    reset       = 1;
   }
  W wf_cyc;
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = P0;/* if next shift_port is P0; I need to replace this with M0; and next shift_port's P0 with 00;
    port3       = 0;
    reset       = 1;
   }
  W wf_cyc;
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = P0;/* if next shift_port is P0; I need to replace this with M0; and next shift_port's P0 with 00;
    port3       = 0;
    reset       = 1;
   }
}
$ cat script.pl
use warnings;
use strict;

die qq[Usage: perl $0 <input-file>\n] unless @ARGV == 1;

my @range_lines = ();

while ( <> ) {
        chomp;
        if ( m/\A\s*(?i:shift_port)\s*=/ ... m/\A\s*(?i:shift_port)\s*=/ ) {
                push @range_lines, $_;
                next;
        }

        if ( @range_lines ) {
                if ( $range_lines[0] =~ m/=\s*P0\s*;/ &&
                         $range_lines[ $#range_lines ] =~ m//
                ) {
                        $range_lines[0] =~ s/P0/M0/;
                        $range_lines[ $#range_lines ] =~ s/P0/00/;
                }

                printf qq[%s\n], join qq[\n], splice @range_lines;
        }

        printf qq[%s\n], $_;
}
$ perl script.pl infile
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = M0; /* if next shift_port is P0 I need to replace this with M0; and next shift_port's P0; with 00;
    port3       = 0;
    reset       = 1;
   }
  W wf_cyc;
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = 00;
    port3       = 0;
    reset       = 1;
   }
  Macro "Inputs" { 
    test_ip =
        110111010110
  }

  W wf_cyc;
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = 00;
    port3       = 0;
    reset       = 1;
  }
  W wf_cyc;
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = 00; 
    port3       = 0;
    reset       = 1;
   }
  W wf_cyc;
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = M0;/* if next shift_port is P0; I need to replace this with M0; and next shift_port's P0 with 00;
    port3       = 0;
    reset       = 1;
   }
  W wf_cyc;
  V { 
    port1       = P;
    port2       = 0;
    shift_port  = 00;/* if next shift_port is P0; I need to replace this with M0; and next shift_port's P0 with 00;
    port3       = 0;
    reset       = 1;
   }
}