Indian tyre maker MRF profit plunges on higher rubber costs

MRF

06/02/2025 07:37

Feb 6 (Reuters) - Indian tyre maker MRF  MRF.NS  posted a near 40% fall in third-quarter profit on
Thursday, as higher rubber costs outweighed steady demand for tyre, sending its shares more than 3% lower.
    Standalone net profit was 3.07 billion rupees ($35.06 million) in the quarter ended Dec. 31, missing
analysts' average estimate of 4.2 billion rupees, according to LSEG data.
    Revenue from operations rose 13.8% to 68.83 billion rupees, beating analysts' average estimate of 67.33
billion rupees, while total expenses increased 20.6%.
    MRF makes tyres for vehicles of Hyundai Motor India  HYUN.NS  and Bajaj Auto  BAJA.NS , among others.    
    
    For further earnings highlights, click (Full Story)
    
KEY CONTEXT
    Prices of rubber, a key raw material for tyre makers, rose in the December quarter, analysts said. Cost of
materials consumed rose 23.8% to 46.34 billion rupees for MRF.
    Total vehicle sales in India rose 3.1% year-on-year in the reported quarter, compared with a 19.5% jump in
the year-earlier period. This weighed on tyre makers such as MRF, which depend on auto sales for a big chunk of
their revenue.
    Meanwhile, replacement demand, where customers change old or worn-out tyres with new ones, along with price
hikes helped boost revenue, analysts said.
          
PEER COMPARISON
        
                                   Valuation      Estimates (next 12         Analysts' sentiment            
                                   (next 12            months)                                          
                                    months)                                                             
                         RIC      PE    EV/EBI   Revenue      Profit     Mean     # of      Stock to      Div
                                         TDA    growth (%)  growth (%)  rating*  analyst     price       yield
                                                                                    s       target**      (%)
 MRF                   MRF.NS    21.83  10.36     10.78       12.94      Sell       4         0.95        0.17
 CEAT                  CEAT.NS   17.68   7.71     13.61       30.07       Buy      15         0.92        0.98
 JK Tyre &             JKIN.NS   9.04    6.04      7.50       17.56       Buy       4         0.63        1.44
 Industries                                                                                             
 Apollo Tyres          APLO.NS   13.97   6.87      7.49       26.97       Buy      22         0.80        1.42
 
* The mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is
trading above the PT



OCTOBER-DECEMBER STOCK PERFORMANCE
    
    
    
    
    
    
-- All data from LSEG

-- $1 = 87.5575 Indian rupees  

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MRF Q3 Performance    https://tmsnrt.rs/40GhjL0
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 (Reporting by Meenakshi Maidas in Bengaluru; Editing by Subhranshu Sahu)
 ((Meenakshi.Maidas@thomsonreuters.com; +91 8921483410;))