Last updated: 30 Jun, 2020 | 04:58 am
MRF, The largest tyre maker in the country announced its Q4 results!
Net Profit Doubled: The company’s consolidated net profit surged to Rs. 679.02 crore (+131%) compared to Rs. 293.93 crore in the same period last year. This was due to a lower tax expense as the government had cut corporate taxes early in the financial year and cheaper raw material prices. The profit before tax actually reduced by 20% YoY.
Revenue from operation fell due to lower demand: Revenue from operations stood at Rs. 3685.16 crore (-10.9%) compared to Rs. 4137.67 crore last year in the same period. The tyre industry has been facing demand problems emanating from the crisis that the automobile sector has been facing for some time. The pandemic has amplified the already troubled sector.
Exports Increased YoY: As of March 2020, the Company’s export stood at Rs.1651 crore (+5.4%) compared to Rs.1566 crore in the previous fiscal. Exports account for almost 10% of the revenue of the company.
Final Dividend: The board has recommended a final dividend of Rs.94 per share for FY20. Including the interim dividends, It brings the total to Rs. 100 per share as dividends for FY20 (dividend yield of 0.15%) The government’s announcement of putting restrictions on the import of tyres would give a small boost to the troubled sector. Do read our latest analysis on the tyre industry and the impact of export ban.
The company has approximately 30% market share in the country and is currently trading at a trailing P/E of 27 which is higher than the industry P/E of 20.
Our VGQM stock analysis model currently has a HOLD rating on the stock.