Leading tyre maker MRF reported a significant fall in net profit on a year-on-year basis for the second quarter in a row.

For the quarter ended December 31, 2021, the company reported a massive 71 per cent drop in standalone net profit at ₹146 crore as compared to ₹512 crore in the same period the previous fiscal despite growth in income. 

Revenue from operations grew 6 per cent to ₹4,830 crore during December 2021 quarter when compared with ₹4,567 crore in the year-ago period, according to a statement.

Total expenses stood at ₹4,702 crore (₹3,950 crore). MRF’s profit before exceptional items and tax was lower at ₹197 crore (₹680 crore).

“Subdued recovery in the replacement market impacted tyre companies’ bottomline,” said an analyst from a leading brokerage house.

The Competition Commission of India, on February 2 issued an orde imposing a penalty on certain tyre manufacturers, including the company, and the Automotive Tyre Manufacturers’ Association, for breach of the provisions of the Competition Act 2002, during the year 2011-12 and imposed a penalty of ₹622.09 crore on the company. The company is in the process of pursuing appropriate legal remedies and believes it has good grounds for a successful appeal based on its assessment and hence has not made any provisions in its books, the company said.

The board of MRF approved the payment of a second interim dividend of ₹3 per equity share (30 pre cent) for fiscal FY22. 

The board also approved the re-appointment of Rahul Mammen Mappillai as Managing Director for a period of five years with effect from May 4, 2022, subject to the approval of shareholders.

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