Tyre manufacturer MRF has more than doubled its net profit at ₹261 crore for the quarter ended June 30, 2018 from ₹106 crore in the same period last year, despite a fall in topline.

Revenue from operations stood at ₹3,856 crore during the quarter against ₹3,972 crore last year.

Total expenses for this quarter were at ₹3,510 crore (₹3,926 crore). The year-ago quarter had an excise duty amount of ₹405 crore under expenses section.

Raw material costs were lower at ₹2,320 crore (₹2,340 crore). Depreciation and amortisation expense was higher at ₹187 crore (₹167 crore). Other expenses were also higher at ₹669 crore (₹628 crore).

Profit before exceptional items and tax stood at ₹397 crore (₹135 crore).

The auto industry maintains an optimistic view regarding the domestic sales volume growth of both commercial and personal vehicles in financial year 2019.

Tyre companies are, therefore, expected to reap the benefits of the buoyant growth prospects for auto OEMs, and consequently, in time, replacement demand will also be robust, given the steady growth in vehicle population, said MRF’s latest annual report.

There has been increased acceptance of Indian tyres in the overseas markets, both in terms of quality and pricing.

However, Chinese brands will continue to play their predatory pricing game in all overseas markets. This will remain a key challenge that Indian tyre manufacturers will have to contend with apart from spiralling crude oil prices, geo-political and diplomatic tensions, particularly in West Asia, it said.

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