MRF Q2 Standalone Net Profit Declines 28% to Rs 369 Crore as Raw Material Costs Surge
Leading Indian tyre manufacturer MRF Limited reported a 27.8% year-on-year drop in standalone net profit to Rs 369.15 crore for the quarter ended September 30, down from Rs 511.59 crore reported in the corresponding quarter of the previous financial year. The sharp decline in bottom-line profitability came despite robust top-line momentum, driven by severe raw material inflation that eroded operating margins.
Revenue from operations grew 17.6% year-on-year to Rs 8,523.96 crore compared to Rs 7,249.68 crore in the year-ago period. Consolidated revenue from operations stood at Rs 8,660.19 crore, up 17.4% from Rs 7,378.72 crore recorded in the same period last year.
Key Financial Highlights (Standalone)
- Revenue from Operations: Rs 8,523.96 crore, up 17.6% from Rs 7,249.68 crore.
- Net Profit: Rs 369.15 crore, down 27.8% from Rs 511.59 crore.
- Profit Before Tax (PBT): Rs 498.13 crore, compared to Rs 682.41 crore in Q2 FY26.
- Basic Earnings Per Share (EPS): Rs 870.40, down from Rs 1,206.26 in the year-ago quarter.
- EBITDA: Declined 16.3% year-on-year to Rs 913 crore from Rs 1,090 crore.
- EBITDA Margin: Contracted by 430 basis points to 10.7% from 15.0%.
Input Cost Pressures and Margin Contraction
The primary drag on the company's profitability was the surge in raw material consumption expenditure. On a standalone basis, the cost of materials consumed jumped nearly 44% year-on-year to Rs 6,538.07 crore from Rs 4,543.23 crore in the corresponding period of the previous fiscal. Standalone total expenses advanced 22.2% to Rs 8,153.50 crore compared with Rs 6,673.97 crore a year earlier, outpacing top-line expansion.
Tyre manufacturers across India have been navigating elevated prices for domestic and imported natural rubber, following adverse weather conditions and supply tightness in major Southeast Asian and domestic producing belts. Concurrently, volatility in crude oil prices influenced key petrochemical-derived inputs like synthetic rubber, carbon black, and tyre cord fabric, forcing tyre makers to absorb portion of the input cost spike despite periodic price adjustments.
Peer tyre manufacturers including CEAT and JK Tyre have also reported margin contraction in their respective September-quarter earnings due to similar raw material headwinds.
Interim Dividend Declared
MRF’s Board of Directors declared an interim dividend of Rs 3 per equity share (30% on face value of Rs 10 each). The company has fixed November 17 as the record date to determine shareholder eligibility for the payout.
