MRF Ltd
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
MRF Ltd is currently facing a challenging operating environment, as highlighted by management's commentary on significant margin compression and cautious demand outlook. Despite resilient top-line growth driven by OEM and replacement demand, profitability is under pressure due to rising raw material costs and supply chain disruptions. Vista's financial outlook reflects these challenges, projecting a modest revenue CAGR of 1% over FY26-28, with margins expected to decline to 7.20%. The company's conservative balance sheet, characterized by low leverage, supports financial stability, but the current valuation appears elevated given the muted earnings trajectory. Industry dynamics, including improving pricing power and robust export growth, provide some support; however, geopolitical tensions and inflationary pressures remain headwinds. Over the next 12-24 months, MRF's key opportunities lie in effective cost management and strategic pricing actions, while watchpoints include the potential impact of a sub-normal monsoon on demand and ongoing raw material cost volatility
Why We Like This Stock
- Strong OEM and replacement demand supports top-line growth
- Low leverage structure enhances financial stability
- Improving pricing power in the tyre industry may help mitigate margin pressures
Things To Watch Out For
- Significant margin compression due to rising raw material costs
- Cautious demand outlook influenced by potential sub-normal monsoon
- Current valuation appears expensive relative to muted earnings growth
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 25,169 | 28,152 | 31,149 | 31,392 | 34,483 |
| Profit Before Tax (Cr.) | 2,797 | 2,478 | 3,285 | 2,748 | 3,174 |
| PBT Margin | 11.1% | 8.8% | 1054.6% | 8.8% | 9.2% |
| Net Profit (Cr.) | 2,164 | 1,869 | 2,522 | 2,102 | 2,428 |
| Earnings Per Share | 5102.8 | 4408.7 | 5948.1 | 4956.6 | 5726.6 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| CLSA | ▲ Outperform | 165,000 | 12-Aug-2026 |
| Kotak Securities | ▼ Sell | 125,000 | 12-Aug-2026 |
| Motilal Oswal | ▼ Sell | 113,936 | 12-Aug-2026 |
Company Overview
Show Company Profile
MRF Limited, together with its subsidiaries, engages in the manufacture and sale of rubber products in India and internationally. The company provides tires for passenger cars, two wheelers, fighter aircraft, farm, trucks, OTR, SCV, LCV, pick up, three wheeler, MCV, ICV, and tubes and valves products; rubber products, such as tubes, flaps, and tread rubber products; and manufactures specialty coatings. It also involved in the paints and coats, sports goods, and motorsports businesses. In addition, the company operates MRF T&S that provide computerized nitrogen inflation, tubeless repair, wheel alignment, wheel balancing and tire changing; MRF TireTok which offers robotic wheel alignment, vehicle safety test lane, diagnostic wheel balancing, semi-automatic tyre changer, A/C recovery and recharging, electronic headlight aligner, nitrogen generator membrane type, and special two-wheeler tire changer; MRF Tyredrome; MRF FASST that offers wheels removal and refitment, and tire mounting and de-mounting services; and MRF MuscleZone shops, as well as provides training for light and heavy commercial vehicle driving. The company was founded in 1946 and is based in Chennai, India.