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MRF Limited is one of the largest manufacturers of tyres and a leading player in the rubber products industry in India. Apart from tires, MRF is involved in tubes, flaps, tread rubber and conveyor belting. Itis diverse businesses also include pretreads, paints, coats and toys.
MRF supplies products for various vehicles, including passenger cars, two-wheelers and even trucks. Recent product launches include the MRF Wanderer-Sport, an SUV tyre designed for soft-roaders and the MRF S3P4, a mileage radial tyre for drive axle fitment. Current Share Price Overview As at writing on Oct 16th, MRF shares price stand at Rs 129,559.
40 after a slight drop of 0.19%. MRF has a market cap of Rs 553.
73 billion, earnings per share (EPS) of Rs 5,324.15 and with a trailing price-to-earnings (P/E) ratio of 24.53, slightly lower than the sector P/E of 33.
76. The forward dividend yield for the company is 0.28%, with a dividend of Rs 369.
00 per share. MRF is actively involved in the international tyre markets as well as locally, as maintains its market players in India. Historical Price Analysis MRF stock price has grown over the years.
Its shares are among the highest priced in the Indian stock market. Despite some losses and fluctuations it has maintained an uptrend due to consistent financial performance, product innovation and expansion into new markets. In the last year, the stock has shown a slight dip from its high, with a one-year target estimate of Rs 109,520 indicating potential for future growth.
MRF Performance Metrics For Q4 of FY24, MRF reported a net profit of Rs 379.6 crore. This was a 7.
6% decrease from Rs 410.7 crore in the same quarter the previous year. Its revenue from operations rose by 8.
6% year-over-year (YoY) reaching Rs 6,215.1 crore. EBITDA grew by 5% to Rs 885.
7 crore, although the EBITDA margin dropped slightly from 14.7% to 14.3%.
On a consolidated basis, MRF’s Q4 net profit rose by 16% YoY to Rs 396.11 crore and with revenue from operations growing 8.38% to Rs 6,349.
36 crore. This was as a result of the company's improved performance and stronger financial position, even at the time of cost pressures. MRF declared a final dividend of Rs 194 per share or 1,940% on a face value of Rs 10.
For the entire FY24, the total dividend amounted to Rs 200 per share equivalent to 2,000% per share. This includes two interim dividends of Rs 3 each paid earlier in the financial year. For FY24, MRF net profit increased and reached Rs 2,081.
23 crore compared to Rs 768.94 crore for FY23. This growth was due to a 9.
39% rise in revenue from operations, which amounted to Rs 25,169.21 crore for FY24, up from Rs 23,008.50 crore in FY23.
MRF profitability remained strong, backed up by its operational efficiency and successful cost management strategies. MRF performance In Relation to S&P MRF has performed fairly well when compared to the S&P BSE SENSEX. In the short term MRF's Year-to-Date (YTD) return is 0.
11%, underperforming the S&P which gained 12.36% during the same period. MRF achieved a good return of 16.
99% in one year, but once again it is still below what S$P records (22.19%). But MRF shines over longer-term horizons.
For 3-year period the company achieved a strong return of 52.87%, comfortably above that of SENSEX’s 32.40%.
Additionally, over the 5-year period, MRF recorded a return of 101.19%, slightly trailing the SENSEX’s 107.85%.
These long term returns show MRF’s consistent business growth over time and its potential as a strong investment opportunity in tyre and rubber industry. This is it even though in shorter perspective MRF has been under performing in comparison to broader market. Earnings and Revenue Performance In Q3 FY23, MRF beat earnings expectations with a positive surprise of $64.
83 after strong operational performance. The quarters that followed had not so good results. In Q4 FY23, MRF fell short of earning estimates by $39.
17 and in the first quarter of FY24, earnings also missed by $313.12. But the earning performance could improve in Q2 FY24 expected next month because there are strong indicators that MRF will post earnings of +1,019.
25 per share. We went ahead and compared revenue versus earnings. MRF has consistently generated strong revenues across all recent quarters.
Between Q3 FY23 and Q4 FY23, revenues played around Rs 60-70 billion while earnings remained lower at around Rs 5.71 billion. From this trend, this can indicate that although the company has impressed with the top-line growth, rising cost or other financial problems have reduced profitability.
The company is expected to post second-quarter earnings performance as well as report the next Q2, FY24 earnings on the 1st of November 2024. The report will assess how close MRF has come in terms of earnings as compared to its revenues. The future growth potential of MRF remains positive owing to innovation in products and expanding demand in certain market segments.
MRF is augmenting its portfolio in the tire market with new products like the MRF Wanderer-Sport for SUVs and the MRF S3P4 for economical vehicles. More so, the growth of the Indian automotive industry, especially in the passenger vehicle and two-wheeler segments, is anticipated and will provide a solid foundation for the sales of MRF’s products. Also, the expansion of the company’s product range with the penetration to the premium tyre segment makes it possible to cater to the growing needs from the SUV and luxury car markets.
With urban populations increasing and infrastructure development in India rapidly advancing, a boost in the demand for commercial vehicle tyres could be expected, improving MRF’s market outlook. Internationally, the already formed presence of MRF in global markets gives it opportunities for further growth. Focus on improving exports and developing distribution channels will become the main factors of future growth.
Even with a competitive environment and cost pressures due to higher prices for raw material MRF should be able to maintain a positive growth trend owing to its strong focus on innovation and efficiency optimization. In the near future, MRF expands its growth potential due to the variety of the product range and the high level of brand awareness. MRF Price Prediction MRF Technical Analysis Technical outlook remains overall bullish although recenty there has been short term downtrend.
The stock reached a high of Rs 151,445 on February 23rd 2024. But it was rejected at this level and it therefore pulled back to find support at around Rs 117,000 in early June 2024. Since then MRF has been trading bullish in respect to an ascending trendline that has provided strong support.
But recent bias indicate a bearish bias in the short term, with the stock down 2.18% over the past week, 3.67% over the past month and 2.
26% over the past three months. This short term drop tells that the price correction is more likely continue until whe we find a solid support level. But the question that remains is, how deep can it correct? Where exactly? A crucial level to watch is the Rs 124,000 zone where the ascending trendline could provide support.
A bullish reversal at this level could likely signal the a recovery and possibility of MRF’s uptrend. But, if this support is broken, it may lead to lower prices. Closely monitoring this zone for signs of a reversal before considering to long your positions.
Conclusion The success story of MRF Limited is admirable as it has managed to weather storms in the tire and rubber industry while remaining afloat financially. Sure, there are concerns about the immediate future like reported decline in earnings, as well as, underperformance with respect to SENSEX, but the outlook for MRF is robust in the long term. The present story of MRF allows to conclude that the company always strives for product improvement, increases its penetration into new markets and implements such strategies on domestic and foreign markets.
From a technical perspective these should be viewed with a degree of caution and await crucial earnings reports which will help determine the future expectations of the firm. Notwithstanding, MRF Limited’s sound fundamentals alongside their market leadership should stand them in good stead through their long-term plans..
