7 days ago
Indian tyre maker MRF's quarterly profit slips on higher rubber prices
Aug 12 (Reuters) - Indian tyre maker MRF ( opens new tab reported a nearly 14% drop in first-quarter profit on Tuesday, pressured by higher rubber costs.
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 ( opens new tab and Bajaj Auto ( 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 ( opens new tab missed its quarterly profit estimate last month, while Goodyear India ( 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
