India's MRF Q3 profit jumps three-fold on uptick in two-wheeler sales

JK Tyre & Industries

09/02/2024 07:45

BENGALURU, Feb 9 (Reuters) - 
    Indian tyre maker MRF  MRF.NS  reported a three-fold rise in
third-quarter profit on Friday, helped by an uptick in
two-wheeler sales.
    MRF, the country's top tyre maker and the most expensive
stock, said its profit from continuing operations for the three
months ended Dec. 31 rose to 5.08 billion rupees (around $61
mln) from 1.69 billion rupees.
    The results are largely in line with those of other tyre
makers, who reported profits that grew between 70% and 400%.
    Analysts said MRF, unlike fierce competitors JK Tyre
 JKIN.NS  and CEAT  CEAT.NS , had not been able to hike prices
during the quarter. Instead, the company benefited from a
rebound in two-wheeler sales and replacement demand, a key sales
driver for tyre makers in the country.
    Two wheeler sales were up around 23% year-on-year in the
third-quarter, the fastest growth so far this fiscal, helped by
a revival in rural demand.
    This helped it make up for sluggish sales in the bus and
truck segments, in which MRF has a higher exposure compared to
rivals, and drove revenue up an industry-leading 9.3%.
    "It would be tough for the industry to hike prices easily
going ahead due to major raw material basket inflation and thus
result in margin mean reversion," ICICI Securities said in a
note in late December.
    Total expenses rose a modest 1%, with raw material costs
dipping slightly.
    The company's shares, which have been near record levels for
the last few months, were down 1% earlier in the session and
fell 3% after the results.

($1 = 82.9875 Indian rupees)

 (Reporting by Nandan Mandayam in Bengaluru; Editing by Janane
Venkatraman
)
 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))