Rising rubber prices dent MRF Q3 net

Our Bureau Chennai | Updated on July 28, 2011 Published on July 28, 2011

Escalating rubber prices have dragged down the net profit of MRF Ltd by 48 per cent to Rs 31.95 crore for the third quarter ended June 30, 2011. Net sales grew 33 per cent to Rs 2,807.72 crore.

“Even an over 30 per cent growth in topline could not cover for the cost push; we could only pass on some of it to our customers,” said Mr Koshy K. Varghese, Executive Vice-President, Marketing, MRF.

Rubber prices have grown from Rs 160 a kg in end-June last year to Rs 234 in January 2011. MRF in the last quarter hiked prices by 8-10 per cent across various product categories.

While softening rubber prices in the last 10 days does give some relief, it doesn't fully cover the steep cost push, said Mr Varghese.

Rate hikes

Hike in repo rates and drop in car sales have also put the sector under a lot of pressure, he said. “OEMs have now recalibrated their numbers for the next quarter. The entire auto industry will go through an upheaval. We have to wait and watch what happens.”

Earnings per share fell 48 per cent to Rs 75.33. MRF follows an October-September financial year.

The MRF scrip fell 3.14 per cent on Thursday on the BSE to Rs 7,120.20.

Published on July 28, 2011
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