Leading tyre maker MRF has more than doubled its net profit at ₹512 crore for the quarter ended December 21, 2020 compared to a net profit of ₹237 crore in a year-ago period, on account of strong operating margin, supported by robust replacement demand.

Revenue from operations stood ₹4,567 crore during the quarter when compared with ₹4,009 crore in the year-ago period, an increase of 14 per cent.

Its total expenses for Q3 were at ₹3,950 crore when compared with ₹3,718 crore, while cost of raw materials consumed stood at ₹2,624 crore (₹2,313 crore).

Indian tyre industry recorded all-time high levels of revenues and profits for a single quarter during Q3 FY2021. For the quarter, the industry revenues grew by over 20 per cent aided by stable replacement demand and sharp recovery in the OE and export segments.

“Revival in economic activities, improving consumer demand, contraction in tyre imports following the government restrictions and stable rural output supported the demand and revenues during the quarter. Favourable demand together with the benefits of softer input costs and cost conservation measures aided the growth in earnings,” says Subrata Ray, Senior Group Vice-President, Icra.

Interim dividend

Meanwhile, the MRF board announced a second interim dividend of ₹3 per share for this fiscal. The board also approved the company’s plan to raise up to ₹1,000 crore through issue of NCDs through private placements.

Despite the strong show, shares of MRF fell 7 per cent to ₹90,076 on Thursday.

 

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