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Informist, Wednesday, May 6, 2026

 

By Gopika Balasubramanium

 

MUMBAI – Chennai-based tyre manufacturer MRF Ltd. is expected to showcase a decent performance in the March quarter, led by ample demand from automobile companies, good traction in the replacement segment, and strong exports, translating to healthy top-line growth. Although the bottom line is also expected to rise, there is a possibility that the rise in price of rubber may have eroded some of the growth.

 

The tyre maker's March quarter net profit is expected to grow over 38% on year to INR 6.87 billion, as per an average of estimates from five brokerages. In the year-ago quarter, the company's net profit was INR 4.98 billion and its revenue was INR 69.44 billion.

 

Elara Securities (India) Pvt. Ltd. expects the company's net profit to rise 47% on year to INR 7.30 billion, which is the highest forecast among the five brokerages. On the other hand, Equirus Securities Pvt. Ltd. expects the profit to rise 28% on year to INR 6.40 billion. Projections for net profit growth from the remaining brokerages are between 30% and 43%.

 

Sequentially, however, the bottom line is seen falling 3-15%. This is mainly on account of an increase in the cost of petroleum-linked raw materials, especially synthetic rubber, after crude oil prices shot up on supply chain disruptions induced by the US-Iran war. Sustenance of the price of crude oil above $100 per barrel poses a near-term "cost headwind" for automotive part makers with costs of key inputs linked with petroleum, such as plastics and synthetic rubber, going up, Elara Securities said. Rubber prices increased 12% sequentially in the March quarter, after having cooled over 6% in the December quarter. The price of natural rubber has also gone up in this period.

 

MRF's top line is expected to rise 16% on year to INR 80.50 billion, as per the average of estimates. From the trailing quarter, the company's sales are seen rising a scant 1.5%. MRF is expected to deliver healthy growth during the March quarter driven by strong demand from original equipment makers and the replacement business, Equirus Securities said. Kotak Securities Ltd. expects the revenue to rise because of a double-digit growth in volumes in the original equipment manufacturers segment and high-single-digit growth in the replacement segment. While Kotak Securities expects the export segment volume to rise substantially, Equirus Securities sees it remaining weak.

 

The highest estimate for MRF's revenue from operations for the March quarter is INR 82.90 billion from Elara Securities. The lowest estimate is INR 79.57 billion from Equirus Securities. On a year-on-year basis, growth projections for the company's top line are in the range of 14-19%. 

 

MRF's earnings before interest, tax, depreciation, and amortisation for the March quarter are projected in the range of INR 12.65 billion and INR 13.90 billion, as per estimates from four brokerages. All four expect the EBITDA margin to fall sequentially and land between 16.4% and 16.9%. "Margins... are anticipated to decline sequentially due to rising raw material costs driven by rupee depreciation, with the company not taking any price hikes to offset it," Equirus Securities said. Motilal Oswal Financial Services Ltd. sees the rising input costs making a material impact on the margins of tyre companies from the June quarter onwards.

 

For the December quarter, MRF had reported a net profit of INR 6.79 billion on a revenue of INR 79.34 billion. The stock has declined 11% since the company released its results for the trailing quarter. At 1425 IST Wednesday, the shares were up 1.3% at INR 129,815 on the National Stock Exchange. 

 

Following are the Jan-Mar earnings estimates, in INR billion, for MRF from five brokerage firms in descending order of net profit estimate:

 

Brokerage	Net Sales	Net Profit	EBITDA
Elara Securities (India) Pvt. Ltd.	82.90	7.30	13.90
Kotak Securities Ltd.	79.85	7.15	13.21
Motilal Oswal Financial Services Ltd.	80.24	7.02	13.53
Anand Rathi Share and Stock Brokers Ltd.	79.95	6.51	-
Equirus Securities Pvt. Ltd.	79.57	6.40	12.65
Average	80.50	6.87	13.32

 

End

 

Edited by Rajeev Pai

 

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