Indian tyremaker MRF's profit soars on cooling rubber prices, higher demand

MRF

03/05/2023 08:58

CHENNAI, May 3 (Reuters) - Indian tyremaker MRF Ltd
 MRF.NS  on Wednesday reported its fourth-quarter profit more
than doubled, as rubber prices cooled and higher vehicle sales
prompted increased demand for tyres.
    Standalone profit from continuing operations rose nearly
161% to 4.11 billion Indian rupees for the quarter ended March
31, according to an exchange filing.
    Total expenses rose roughly 5% in the quarter, slowing from
a 23% growth in the first nine months of the fiscal year, as
rubber prices eased 3% sequentially in the fourth quarter
according to a preview note by Elara Capital analysts.
        Analysts expect tyremakers including MRF to have booked
profits amid a fall in raw material prices, with price increases
they had put in place over the last year tipped to further drive
bottom lines.
  
    Revenue from operations rose 10% to 57.25 billion rupees.
    Indian automakers recorded higher sales in the March quarter
as consumers snapped up passenger and commercial vehicles ahead
of price increases coming on the back of implementation of
tighter fuel emission norms.
    However, while wholesale commercial and passenger vehicle
sales growth moderated in April, analysts expect demand for
replacement tyres would provide cushion to tyremakers including
MRF, Apollo Tyres Ltd  APLO.NS , JK Tyre & Industries Ltd
 JKIN.NS  and CEAT Ltd  CEAT.NS  in the coming quarters.
    Shares of MRF, which started as a toy balloon manufacturer a
year before India's independence, rose more than 4%
post-results. The company declared a final dividend of 169
rupees per share for the fiscal year 2023.

 (Reporting by Praveen Paramasivam in Chennai; Editing by Varun
H K)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))