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Tyre manufacturer MRF Ltd has posted a 4.5 times rise in net profit for the third quarter at Rs 144 crore (the company follows an October-September financial year). Net sales rose 17 per cent (year-on-year) to Rs 3,006 crore.
This has been possible due to an exceptional item. “The exceptional item represents an excess depreciation reversal in respect of earlier years of Rs 404 crore in September 2011 due to change in method (of reporting) from written-down to straight line method,” said the company in a release. There is also a recasting of depreciation for the quarter and nine months ended June 30, 2011, of Rs 34.98 crore and Rs 79.67 crore, respectively, to conform to current quarter/nine month presentation, said the company.
The company was also helped by lower raw material costs. Raw material as percentage of sales has come down to 71 per cent this quarter from 77 per cent the year before. This is because of the cooling off of natural rubber prices in recent months, according to analysts. Because of this, operating margins expanded from 5.9 per cent last year to 10.7 per cent this quarter.
The board of directors has approved the payment of interim dividend of Rs 3 an equity share payable to shareholders on August 7.
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