MRF (Madras Rubber Factory Limited) is a Chennai-based tyre manufacturer that produces tyres, conveyor belts as well as toys.
*Note: Prices that are specified below is based on INR
MRF Historical Share Price (NSE)
MRF Market Capitalisation
MRF’s market capitalisation as of March 2018 is approximately Rs.30,000 crore.
Company’s Wealth and Recent Performance
- Favourable market conditions as well as strong Q3 results in FY 17-18 kept prices steady and inspired investor confidence in the shares.
- A 17% rise in profits year-on-year were announced which helped the stock tide over a turbulent market.
- The company has also seen a revival in fortunes as the rubber price fell towards the end of November 2017. Favourable markets and new product launches such as the rollout of luxury car tyres boosted the company’s profile.
- The company posted a EBITDA of Rs.703 crore for the quarter ending December 2017, as strong private vehicle sales and MRF’s strong distribution network helped boost EBITDA growth by 24% year on year.
- The company will also be supplying indigenously designed tyres for the Indian Air Force’s Sukhoi fleet, which has boosted growth projections and sales.
MRF Stock Trends in 2018
- The company’s stock was priced at Rs.72,270 on 1 January, 2018 as markets were buoyant as a result of positive movement across international bourses as well. A sharp dip in markets across the world led to a plunge in the stock price to Rs.66,950 on 29 January, 2018, with MRF trading at close to Rs.68,500 as the month ended.
- The stock price at opening on 1 February, 2018 was Rs.71,900 as markets began to recover after a sharp downturn. Market corrections led to a dip in the price of the share but a slight recovery was seen as an interim dividend of 30% per share was announced on 9 February, 2018. There was a gradual rise in the share price barring some troughs, as MRF traded at Rs.73,380 on 28 February, 2018 on the BSE on the back of a bullish market.
MRF Stock Trends in 2016 and 2017
- MRF shares traded at Rs.40,500 as trading opened in January 2016, with the price rising steadily over the course of the month. a weak markets led to prices dropping as the quarter ended with MRF trading at Rs.38,370 on 31 March, 2016 due to apprehension over results as well as general market sentiment.
- April 1, 2016 saw MRF trade at Rs.37,365 per share as prices fluctuated due to shaky investor confidence in the markets after a period of turbulence across bourses. A climb in stock prices was seen but momentary dips in value wiped out any gains the stock made. The quarter ended with MRF trading at Rs.33,085 on 30 June, 201 due to stagnant growth across secondary markets, which affected sales.
- The quarter began with MRF trading at Rs.33,630 at opening after robust trading across the continent boosted local confidence in rubber. The declaration of final dividend of 940% on 1 August 2016 led to a minor surge in the stock price, with the momentum carrying the stock past Rs.50,900 on 30 September, 2016 as the sector and markets benefitted from a bull run and conducive economic environment.
- The declaration of Q2 results and resultant positive market sentiment led to the share price skyrocketing to Rs.53,000 in October 2016. The stock price held steady as markets went through a volatile period due to instability in the international equity markets. The declaration of interim dividend of 30% on 8 November, 2016 led to an upward revision in the stock price, with MRF trading at Rs.52,000 during the period. A poor run by the bourses as well as a decline in orders in the segment led to prices falling, as MRF ended the year trading at Rs.49,000 on 31 December, 2016.
- 2017 began with MRF trading at close to Rs.56,300 on the hope of a more positive year in spite of initial apprehension over the election of Donald Trump adversely affecting the economy. Lower valuations led to tyre stocks surging ahead, as evidenced by MRF’s share prices rising to Rs.59,800 on 31 March, 2017. The company also hit the historic Rs.60,000 mark on 23 March, 2017 to cap a successful start to the year.
- Prices continued their ascent on the back of favourable market conditions as well as well as a bull run by the SENSEX following a period of renewed interest in tyre stocks. The company’s performance improved as the stock inched towards a whopping Rs.70,000 in May, 2017. Prices appreciated on news of an overall improvement in the sector, with MRF trading at approximately Rs.69,000 as the quarter ended on 30 June, 2017.
- The following quarter saw MRF trading at approximately Rs.70,100 per share. The company listed a profit of Rs.134 crore for the quarter ending June, 2017, marking a significant decline in earnings compared to the previous quarter. In spite of this, the company announced a final dividend of 540% which resulted in a rise in the stock price, though this was momentary. The stock price declined significantly over the rest of the quarter, trading at Rs.61,000 on 30 September, 2017.
- There was a significant rise in the share price as the company’s performance rose after a dismal previous quarter. MRF declared an interim dividend of 30% on 21 November but an auto slump led to share prices falling. A decline in rubber prices as well as strong performance led to the stock price rising to close to Rs.71,000 towards the end of the quarter.
Why Invest in MRF?
- MRF has been outperforming its peers in the segment and has grown significantly over the past few years. The company recorded a 17% rise in profit for Q3 FY18, in spite of the sector performing poorly due to a rise in rubber prices as well as market vagaries.
- The company’s recent deal to supply tyres to the Indian Air Force’s Sukhoi fleet as well as its entry into the luxury car tyre segment are both slated to result in a rise in revenue, which would influence stock prices in a positive manner.
- The company’s foray into online retailing through a dedicated distributor network and easier access is also projected to reap benefits in the short as well as long-term.
- MRF’s association with the International Cricket Council (ICC) as sponsor for 2016-19 and the resultant publicity and brand promotion saw a significant expenditure on advertising. The gamble has paid off, as the company saw an increase in international sales as well as contracts and wider exposure globally.
Madras Rubber Factory Limited, popularly known as MRF Limited, is a tyre manufacturer headquartered in Chennai, India. The company is the country’s largest tyre manufacturer and also manufactures rubber products such as conveyor belts, paints, toys and treads. MRF manufactures tyres for various markets and provides two, three and four-wheeler tyres and tube for a variety of vehicles.
MRF was one of the first companies to export to the USA and collaborates with a number of global companies such as Hasbro (toy company) and Pirelli (tyre company). MRF is also known for its participation in various capacities in racing, with the MRF Rally Team and MRF Racing the most well-known.
MRF was set up in the year 1946 in Tiruvottiyur, Chennai as a balloon manufacturing company. By 1952, MRF diversified into tread rubber manufacturing and entered into a partnership with Mansfield Tire and Rubber Company, USA in 1960.
By 1973, MRF had established itself as a leading tyre manufacturer in the country and had seen a number of firsts. The company entered into technical collaborations with leading global companies.
MRF has manufactured tyres and other rubber for a number of international entities, entering into a deal with Pirelli to supply conveyor and elevator belts.
It also entered into the toys segment, setting up Funskool and collaborating with leading toy manufacturer Hasbro.
MRF has factories in Kerala, Puduchery, Tamil Nadu and Telangana. Additionally it has plants in Chennai and Goa that manufacture paints and toys, respectively.
K M Vinoo Mammen- Chairman and Managing Director
Mr. Mammen has served as the Chairman of MRF Limited since 2003. Mr. Mammen has been associated with MRF in various capacities, serving as Executive Director since 1981 and Vice Chairman since 1986. In addition to his responsibilities at MRF, Mr. Mammen has served as President of the Indo-Australian Chamber of Commerce and also serves as a Director of the Madras Christian College Board. An alumni of the college, he continues to remain active in the sporting world in the capacity of sponsor and promoter.
Rahul Mammen- Managing Director
Rahul Mammen has served as the Managing Director of MRF Limited since May, 2017. He served as a Director of the company since 2010. Mr. Mammen previously served as the Vice President- Corporate Planning and Development at the company.
He completed his B.A. (Hons) in Economics from St. Stephen’s College. After completing his M.A. in Economics from the University of Madras, he completed his M.B.A. at the University of Ann Arbor, Michigan.
MRF Listings in BSE, NSE and Indices
MRF Limited is listed on the Bombay Stock Exchange as well as the National Stock Exchange. MRF Limited shares can be traded on these bourses as well as a number of other during trading hours.
MRF Limited shares are listed on a number of stock indices, a few of which are listed below:
- Nifty 100
- Nifty 50
- S&P BSE 100
- S&P BSE MidCap
- S&P BSE SENSEX Next 50
The trading codes for MRF Limited are listed below:
The company’s head office is as follows:
124 Greams Road,
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