MRF Ltd., incorporated in the year 1960, is a Large Cap company (having a market cap of Rs 34883.40 Crore) operating in Tyres sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 4874.20 Crore, up 3.59 % from last quarter Total Income of Rs 4705.22 Crore and up 30.14 % from last year same quarter Total Income of Rs 3745.21 Crore. Company reported net profit after tax of Rs 332.15 Crore in latest quarter.
Investment Rationale
MRF has managed to create a strong brand in major segments of T&B, 2W, and PCR over the years. However, aggressive competition has weakened its competitive positioning, which is also reflected in its dilution of pricing power in the PCR and TBR segments as well as in its superior return ratios. The current valuations at 24.7x/20.7x FY22E/FY23E EPS fairly capture the changing competitive dynamics for MRF. The brokerage initiates coverage on MRF with a Neutral rating and TP of INR84,000 (20x Sep-23 EPS).
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