Indian tyre maker MRF's quarterly profit slips on higher rubber prices
Company's net profit fell to 4.84 billion rupees ($55.24 million) for the quarter ended June 30, compared with 5.63 billion rupees last year.
Revenue from operations rose 6.8% to 75.6 billion rupees, while total expenses increased 9.8%, driven largely by a 6.4% rise in the cost of materials consumed, which accounts for more than half of overall expenses.
Shares of MRF dropped 3.5% following the earnings announcement.
For further earnings highlights, click (Full Story)
KEY CONTEXT
Tyre manufacturers such as MRF, which supplies to automakers including Hyundai Motor India (HYUN.NS), opens new tab and Bajaj Auto (BAJA.NS), opens new tab, rely heavily on vehicle sales for a significant portion of their revenue.
Total vehicle sales in the country slipped 5.1% in the reported quarter, compared with a 16.4% growth in the year-ago period.
A surge in domestic rubber prices weighed on tyre manufacturers' first-quarter earnings, analysts said.
Rivals CEAT (CEAT.NS), opens new tab missed its quarterly profit estimate last month, while Goodyear India (GDYR.BO), opens new tab reported a lower profit on Monday, pressured by weak auto demand.
PEER COMPARISON
* The mean of analysts' ratings standardised to a scale of "Strong Buy", "Buy", "Hold", "Sell", and "Strong Sell".
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT.
- All data from LSEG
-- $1 = 87.6160 Indian rupees
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