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Tyre manufacturer MRF Ltd has announced a 163 per cent increase in its standalone net profit for the January-March quarter of 2023. The company’s net rose to ₹410.66 crore compared with ₹156.78 crore in the corresponding quarter of 2022. Notably, the FY Q4 net profit accounted for half of the full year’s net profit of ₹816.23 crore.
The company’s board has recommended a final dividend of ₹169 a share, which along with the two interim dividends of ₹3 each announced previously, takes the total dividend for the year to ₹175 per share of ₹10.
The stock market has taken due note of the company’s performance. On the NSE, the MRF share today rose by ₹4,908.10, to close at ₹93,505. It is pertinent to mention that the equity capital of MRF, whose 2022-23 turnover amounted to ₹22,826.44 crore (standalone), is only₹4.24 crore. In 2021-22, the turnover was ₹19,304.43 crore.
Annual performance
Net profit for the full year 2022-23 (₹816.23 crore) was 26 per cent higher than ₹647.34 crore.
On consolidated basis, the turnover and net profit were₹23,261.17 crore (₹19,633.71 crore previously), and ₹768.96 crore (₹669.24 crore), respectively, indicating that the four subsidiaries of the company proved to be a drag. The auditors have noted that the subsidiaries (MRF Corp, MRF Lanka, MR International and MRF SG Pte), together achieved a turnover of ₹118.32 crore (₹434.73) and net loss of ₹70 crore (₹47.27 crore).
The company has explained in a press release that the reason for the high growth in net profit in the fourth quarter was due to “easing of raw material prices”, compared with the previous three quarters.
“On the back of our brand and product performance, we were able to increase sales across most of our product categories,” Rahul Mammen Mapillai, Managing Director, MRF, told businessline. “In terms of profitability, the reduction in commodity prices has led to a decline in raw material cost for this quarter, which helped to improve our profitability,” he said.
“As mentioned in the notes to the income statement, the stand-alone financials for this quarter also include an exceptional income of Rs. 80 cr. due to the Bilateral Advanced Pricing Agreement (BAPA) signed between India and Singapore. This has been netted off in the consolidated financial results,” Mappillai said.
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