Leading tyre maker MRF  reported a 30 per cent fall in standalone net profit at ₹112 crore for the quarter ended June 30, compared with a net profit of ₹161 crore in the year-ago period, on account of cost increases.

Its profit before exceptional items and tax stood at ₹152 crore  (₹217 crore).   

However, revenue from operations grew 36 per cent to ₹5,599 crore  (₹4,128 crore), supported by a recovery in automotive demand and price increases. 

While the cost of raw materials consumed increased to ₹4,043 crore (₹3,216 crore), total expenses were higher at ₹5,481 crore (₹4,003 crore).

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For FY22, MRF’s standalone net profit declined by 48 per cent to ₹647 crore as against ₹1,249 crore in FY21

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On a consolidated basis, the company’s profit after tax stood at ₹124 crore (₹166 crore), while revenue from operations grew to ₹5,696 crore (₹4,384 crore).

Industry analysts say MRF’s leadership across major segments of truck and bus radial (TBR), two-wheelers, and passenger car radial (PCR) led to the creation of a strong brand and pricing power.

The company enjoys market leadership in two-wheelers, truck and bus bias (TBB), and agri tyre segments, and is among the top three players in PCR and TBR. This has resulted in MRF having the highest profitability and superior ratios, said a recent report of Motilal Oswal Financial Services Ltd.

However, aggressive competition in the recent past has dethroned MRF from the top spot in the PCR and T&B space and resulted in an overall market share loss. With new capacity coming in, MRF should be able to defend its market position. Higher exposure to the TBB segment, which is expected to see muted growth, makes it vulnerable to the trend of radialisation in the T&B segment,” it added.

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