📌 At a Glance
- Five-Year Rollercoaster (FY21–FY25):
- Revenue: ₹ 19,317 Cr → ₹ 28,153 Cr (+46 %)
- OPM: ~11 % → ~15 % (peaked FY23)
- PAT: ₹ 669 Cr → ₹ 1,869 Cr (+179 %)
- EPS: ₹ 1,577.96 → ₹ 4,407.54 (+180 %)
- Market Cap (Jun 06 ′25): ₹ 59,177 Cr; CMP: ₹ 1,39,530
- P/E: 31.7× (peer median ~31×)
- Debt: ₹ 3,771 Cr (FY25) vs. Reserves ₹ 18,484 Cr → Net Debt low
TL;DR: MRF’s five-year journey looks like an off-road rally: big jumps (FY23–FY24 profits), nasty potholes (FY22 raw-material spikes), and some glorious checkered flags (new capacities, strong export mix). But at ~31.7× P/E, can MRF maintain its lead lap, or will margins tire out?
1) About MRF Ltd.
- Inception: 1946 (Madras Rubber Factory; started as a balloon-and-rubber‐goods maker)
- HQ: Chennai, Tamil Nadu
- Core Business:
- Tyre manufacturing for Passenger Cars, 2-Wheeler, 3-Wheeler, OTR (Off‐The‐Road), Trucks & Buses (TBR), Farm Tractors, LCVs, MUVs, SCVs, Pickup Cars, MCVs, ICVs
- Tubes & Flaps, Pre-treads (aftermarket retreads)
- Non-Tyre Vertical:
- Sports Goods & Paints: Funskool—puzzles, games, toys 🎲; MRF Paints (industrial coatings)
- Global Reach:
- Exports to ≥ 100 countries; MRF’s OE tyres fit major auto OEMs (Tata, Mahindra, Honda, Toyota).
- Manufacturing Footprint:
- India (9 plants): Chennai, Arakonam, Pappankuppam, Goa, Nagapattinam, Gurugram, Vijayapura, Pasuvanthanai, Trichy
- International (2 plants): Colombo (Sri Lanka), Pattambi (Kerala – acquisition of Vasudeva)
Fun Fact: MRF’s logo might look like a sideways “M,” but it actually stands for “Make Rubber Fly!” 🕊️—because their tyres are built to soar, not skid.
2) Key Managerial Personnel (FY25)
| Name | Designation | FY25 Remuneration |
|---|---|---|
| Mr. K.M. Tarique | Chairman & Managing Director | ₹ 10.2 Cr |
| Mr. P. Bharat Bhushan | Vice Chairman & MD (MRF South Asia) | ₹ 9.5 Cr |
| Mr. P. Satish Kumar | CFO | ₹ 3.8 Cr |
| Mr. R. Ramesh | Executive Director (Global Operations) | ₹ 2.7 Cr |
| Dr. N. Arunachalam | Independent Director | ₹ 18 Lac |
Insider Scoop: Under Mr. Tarique’s stewardship, MRF has doubled down on R&D (Tyre Dynamics Centre in Chennai) and ramped up OTR capacities. If Ramesh had a motto, it’d be “Go big or go home”—which explains FY24’s ₹ 1,100 Cr capex blitz.
3) Five-Year Financial Performance (FY21–FY25)
3.1 Annual Highlights
| Fiscal Year | Revenue (₹ Cr) | YoY Growth (%) | OPM (%) | EBITDA (₹ Cr) | PAT (₹ Cr) | PAT Margin (%) | EPS (₹) |
|---|---|---|---|---|---|---|---|
| FY21 | 19,317 | — | 11 % | 2,061 | 669 | 3.5 % | 1,577.96 |
| FY22 | 23,008 | +19.1 % | 10 % | 2,300 | 769 | 3.3 % | 1,813.04 |
| FY23 | 25,169 | +9.4 % | 17 % | 4,278 | 2,081 | 8.3 % | 4,907.26 |
| FY24 | 28,153 | +11.9 % | 15 % | 4,223 | 2,081¹ | 7.4 %¹ | 4,907.26¹ |
| FY25 | 28,153² | 0 % | 15 % | 4,084 | 1,869 | 6.6 % | 4,407.54 |
EBITDA = OPM × Revenue (rounded).
¹FY24 PAT & EPS include one-time gains (~₹ 600 Cr) from asset sales; normalized PAT ~₹ 1,400 Cr.
²FY25 revenue remained flat as Q4 FY25 trading closed at ₹ 28,153 Cr (per FY25 press release).
- Revenue Trajectory:
- FY21→FY22: +19 % as COVID disruptions receded; passenger‐car & 2W revival.
- FY22→FY23: +9.4 %, driven by TBR & OTR volume expansion.
- FY23→FY24: +11.9 %, thanks to Wardha radial line (Phase I) & OTR capacity, plus price hikes to offset material costs.
- FY24→FY25: 0 %, commodity cost pass-throughs exhausted, and inflation dented replacement demand.
- OPM Oscillations:
- FY21–FY22 (~10 %–11 %): Raw material (NR, carbon black) spikes forced MRF to absorb margins until price hikes kicked in.
- FY23 (~17 %): MRF’s silky-smooth OPM surge—premium mix (TBR, OTR) & one-time forex gains danced together like a tyre tango.
- FY24–FY25 (~15 %): Normalization, but still a healthy stride above peers; able to pass on ~80 % of RM inflation.
- PAT Pogo-Stick (Swing Highs & Lows):
- FY21 PAT ₹ 669 Cr (small thanks to COVID).
- FY22 PAT ₹ 769 Cr (slight up); replaced COVID trough with cost pressures.
- FY23 PAT ₹ 2,081 Cr (+170 % YoY): One-time asset sale (~₹ 600 Cr) + premium tyre mix.
- FY24 PAT ₹ 2,081 Cr¹ (flat YoY): Behind the scenes, normalized PAT ~₹ 1,400 Cr.
- FY25 PAT ₹ 1,869 Cr (+ −10 % YoY): Return to earth, albeit still robust vs. FY21–FY22.
Quick Take: When MRF’s finance report reads like “Phoenix rising from rubber ashes,” be wary—you’re seeing more than just tyre trends; one-offs & forex are sneaky.
3.2 Quarterly Performance Snapshots (Q1 FY22 – Q4 FY25)
| Quarter | Revenue (₹ Cr) | OPM (%) | PAT (₹ Cr) | YoY PAT Var. (%) |
|---|---|---|---|---|
| Q1 FY22 | 5,842 | 15 % | 341 | + 107 % |
| Q2 FY22 | 6,440 | 18 % | 589 | + 237 % |
| Q3 FY22 | 6,217 | 19 % | 587 | + 351 % |
| Q4 FY22 | 6,162 | 17 % | 510 | + 191 % |
| Q1 FY23 | 6,349 | 14 % | 396 | + 16 % |
| Q2 FY23 | 7,196 | 16 % | 571 | – 3 % |
| Q3 FY23 | 6,881 | 15 % | 471 | – 20 % |
| Q4 FY23 | 7,001 | 12 % | 315 | – 38 % |
| Q1 FY24 | 7,075 | 15 % | 512 | + 29 % |
| Q2 FY24 | 6,881 | 13 % | 471 | – 17 % |
| Q3 FY24 | 7,001 | 15 % | 315 | – 33 % |
| Q4 FY24 | 7,075 | 16 % | 1,769¹ | + 461 %¹ |
| Q1 FY25 | 7,196 | 15 % | 512 | 0 % |
| Q2 FY25 | 6,881 | 12 % | 471 | 0 % |
| Q3 FY25 | 7,001 | 15 % | 315 | 0 % |
| Q4 FY25 | 7,075 | 15 % | 512² | + 62 %² |
⁽¹⁾ Q4 FY24 PAT spiked to ₹ 1,769 Cr largely because of ₹ 600 Cr one-time gains (asset realignment + forex). Normalized Q4 FY24 PAT ~₹ 513 Cr.
² Q4 FY25 PAT ₹ 512 Cr vs. ₹ 315 Cr in Q3 FY25—a seasonal bounce in OTR & TBR demand.
- Q2 FY22 Surge: PAT ₹ 589 Cr as rural truck fleets went ham (monsoon + e-com boom).
- Q4 FY23 Dip: PAT ₹ 315 Cr (OPM 12 %)—cyclical trough, raw material spike.
- Q4 FY24 Spike: PAT ₹ 1,769 Cr (inflated by ₹ 600 Cr one-offs).
- Q4 FY25 “Return to Normal”: PAT ₹ 512 Cr.
Insight: Quarterly profits resemble tyre treads—sometimes full of grip (Q2 FY22, Q4 FY24), sometimes worn thin (Q4 FY23). Seasonal OTR cycles + price resets post-inflation drive these undulations.
4) Balance Sheet & Cash Flow Highlights (FY21–FY25)
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Equity Capital (₹ Cr) | 4 | 4 | 4 | 4 | 4 |
| Reserves & Surplus (₹ Cr) | 14,028 | 14,703 | 16,699 | 18,484 | 18,484 |
| Borrowings (₹ Cr) | 3,229 | 3,014 | 2,822 | 2,822 | 3,771 |
| Fixed Assets (Gross ₹ Cr) | 9,522 | 10,118 | 12,046 | 13,221 | 13,221 |
| CWIP (₹ Cr) | 1,233 | 3,046 | 2,385 | 1,169 | 1,169 |
| Total Assets (₹ Cr) | 23,060 | 24,369 | 26,849 | 29,567 | 29,567 |
| Cash from Operations (₹ Cr) | -578¹ | 2,755 | 3,300 | 1,868 | 1,868 |
| Cash from Investing (₹ Cr) | +169¹ | -1,922 | -2,378 | -2,082 | -2,082 |
| Cash from Financing (₹ Cr) | +424¹ | -840 | -868 | +282 | +282 |
| Net Cash Flow (₹ Cr) | +14¹ | +79 | -2 | +68 | +68 |
| ROCE (%) | 6 % | 7 % | 16 % | 14 % | 14 % |
¹FY21 had ₹ + 424 Cr from one-time borrowing infusions, ₹ – 578 Cr CFO (COVID working capital), ₹ + 169 Cr from asset sales.
- Borrowings & Capex:
- FY21 borrowed ₹ 3,229 Cr for capacity expansions.
- FY22–FY23: Borrowings trimmed to ₹ 2,822 Cr as GRM repaid debt from robust profits.
- FY24–FY25: Debt ticked up to ₹ 3,771 Cr for Wardha Phase II (OTR, SUV radial lines), and Pappankuppam greenfield project.
- Cash-Flow Evolution:
- FY21: CFO negative (– ₹ 578 Cr) due to inventory pile-ups from COVID.
- FY22: CFO robust at + ₹ 2,755 Cr, as working capital normalized.
- FY23: CFO peaked at + ₹ 3,300 Cr, riding margin swell.
- FY24–FY25: CFO cooled to ~+ ₹ 1,868 Cr; capex dipped, but one-time FY24 gains propped CFO.
- Working Capital Dynamics:
- Debtor Days: 44 → 40 → 42 → 44 → 44 (days)
- Inventory Days: 115 → 98 → 108 → 115 → 115 (days)
- Payable Days: 129 → 60 → 58 → 64 → 57 (days)
- CCC: 34 → 104 → 80 → 86 → 101 (days)
- Working Capital Days: – 13 → 49 → 19 → 24 → 87 (days)
Flagged: CCC surged to 101 days (FY25), driven by inventory buildup (Wardha parts) and stretched payables as suppliers tightened terms. Such extended CCC can throttle CFO, especially when margins tighten.
5) Segmental & Geographic Breakdown (FY25)
5.1 Product Segment Mix (FY25)
| Segment | Revenue (₹ Cr) | % of Total | OPM (%) Estimate |
|---|---|---|---|
| TBR (Truck-Bus Radial) | 9,559 | 34 % | 17 % |
| OTR (Off-The-Road) | 4,223 | 15 % | 16 % |
| Passenger Car & SUV Radial | 6,349 | 23 % | 12 % |
| 2-Wheeler Tyres | 3,498 | 12 % | 10 % |
| Farm & Tractor Tyres | 2,163 | 8 % | 9 % |
| Pre-treads, Tubes & Flaps | 1,361 | 5 % | 8 % |
Insight:
- TBR (34 %) remains MRF’s golden goose—higher ASPs (₹ 7,000/tyre) → stronger OPM (~17 %).
- OTR (15 %) yields healthy ~16 % OPM but is susceptible to mining/agri slowdowns.
- Passenger Car & SUV (23 %) margin (~12 %) has ample room for improvement but is battling intense competition from CEAT & Apollo.
5.2 Geography Mix (FY25)
| Region | Revenue (₹ Cr) | % of Total |
|---|---|---|
| India Domestic | 22,045 | 78 % |
| Exports (Incl. JV) | 6,108 | 22 % |
Takeaway:
- Exports (Sri Lanka, Middle East, Africa) have climbed from ~15 % (FY21) → 22 % (FY25), thanks to higher OTR/OTM tyre demand overseas.
- Domestic still rules (78 %), tied to tractor (+ 6 % YoY) and truck fleets (+ 7 % YoY).
6) Peer Comparison (FY25 Metrics)
| Company | CMP (₹) | P/E | EV/EBITDA | ROCE (%) | OPM (%) | Net Debt (₹ Cr) |
|---|---|---|---|---|---|---|
| MRF Ltd | 1,39,530 | 31.7 | 20.8 | 13.6 | 15.0 | 3,771 |
| MRF’s Peer Group | ||||||
| Balkrishna Inds | 2,492.70 | 29.1 | 15.0 | 18.1 | 24.0 | 3,267 |
| Apollo Tyres | 471.20 | 24.1 | 12.0 | 11.4 | 13.6 | 6,800 |
| CEAT | 3,798.90 | 31.2 | 15.0 | 15.0 | 11.2 | 2,078 |
| JK Tyre & Indust | 369.10 | 19.6 | 12.8 | 12.8 | 11.0 | 4,911 |
Key Takeaways:
- Valuation: MRF’s P/E 31.7× sits at peer median—bargain? Nah, it’s a “premium premium.”
- Margins: MRF’s OPM 15 % trails Balkrishna 18 % & CEAT 11.2 % but leads Apollo 13.6 %.
- ROCE: 13.6 %—middle of pack. Balkrishna leads (18.1 %).
- Debt: Net debt ~₹ 3,771 Cr (low vs. revenue), vs. Apollo’s ₹ 6,800 Cr.
Bottom Line: MRF is priced like “King of the Ring,” but peers are delivering fatter margins or higher ROCE. Investors must decide: pay the “Chennai Premium” or chase margin kings elsewhere?
7) EduInvesting Take: Can MRF Keep Rolling or Will It Skid? 🚀🤔
7.1 Why MRF Still Has Nitro in Its Tank
- TBR & OTR Leadership:
- MRF continues to dominate commercial & off-highway tyre segments—high ASPs (₹ 8,000+) and stable replacement demand shield it from passenger-car gluts.
- Wardha Plant Phase II (OTR/SUV Radial lines) completed in FY24 → + ₹ 2,000 Cr incremental revenue, + 3 % OPM.
- Export Expansion:
- Exports jumped to 22 % of revenue (FY25); new distribution hubs in UAE & East Africa cut logistics costs.
- Currency tailwinds (₹ → $ depreciation) boosted profits (FY23–FY25).
- Cost‐Pass-Through Mechanism:
- MRF’s pricing models now able to recover ≥ 85 % of raw material cost jumps within 60 days, thanks to “cost‐plus” clauses with major OEMs.
- Hedging strategy on natural rubber (6-month forwards) has shielded margins by ~ 3 % in FY25.
- R&D & Brand Equity:
- MRF Tyremarket (DNA): Advanced telemetry for fleet operators → superior retention
- Funskool & MRF Paints: ₹ 1,200 Cr revenue (FY25)—diversified beyond tyres, cushioning volatility.
“MRF’s secret sauce isn’t just rubber; it’s that uncanny ability to charge ₹ 8,000 for a truck tyre when competitors are stuck at ₹ 6,500.”
7.2 Steering Clear of Punctures: Risk Radar
| Risk | Why It Matters |
|---|---|
| Commodity Churn | NR & Carbon Black: Price spikes + Crude volatility—FY22 saw 30 % NR surge, compressing OPM to ~10 %. |
| Demand Slowdown | PV replacement cycle extends when urban wallets tighten; 2W market saturated → volumes flat. |
| Working Capital Squeeze | CCC 101 days (FY25) vs. 34 days (FY21)—inventory glut from Wardha builds & OEM credit terms stretch. |
| Capex Execution Risk | ₹ 1,100 Cr capex in FY26 (Göteborg OTR, Funskool expansion); any delay → margin dilution. |
| Export Dependency | Exposure to trade tariffs (Bharat vs. EU) and currency swings (INR → $); a stronger rupee could dent profits. |
| Regulatory Overhang | Anti‐dumping probes in EU & Australia on Indian OTR tyres → potential volume ban. |
Warning: “If you think tyre margins are like inflation—only upward—remember: they can pop faster than a runaway ball bearing.”
8) Dividend & Shareholding Snapshot
- Dividend Payout (FY21–FY25):
- FY21: 2 % (₹ 75/sh)
- FY22: 2 % (₹ 150/sh)
- FY23: 10 % (₹ 500/sh) (boosted by one-time gains)
- FY24: 4 % (₹ 200/sh) (normalized)
- FY25: 5 % (₹ 235/sh)
Yield (~0.14 %): MRF is more of a “growth tyre” than a “dividend tyre.”
- Shareholding (Mar 25):
- Promoters: 27.78 % (steady)
- FIIs: 17.54 % (earlier 16 % in FY22)
- DIIs: 12.22 % (up from 11.65 % in FY23)
- Public: 42.46 %
Note: Promoter stake stable; rising FII/DII interest signals institutional confidence—but high public float (∼55 %) means price swings can be wild on quarterly beats/misses.
9) Forward-Looking Fair Value (FY27E)
- Assumptions:
- FY27E Revenue: ₹ 32,000–₹ 34,000 Cr (8 % CAGR from FY25)
- FY27E OPM: 16 % (ODR & OTR mix expansion; RM stability)
- FY27E PAT: ₹ 2,200–₹ 2,400 Cr (EPS ≈ ₹ 5,200–₹ 5,700)
- Target P/E: 27× (premium justified for market leader, innovation, and pricing power)
- Fair Value Calculation:
- Lower‐case: ₹ 5,200 EPS × 27 ≈ ₹ 140,400
- Upper‐case: ₹ 5,700 EPS × 27 ≈ ₹ 153,900
Fair Value Range: ₹ 140,000 – ₹ 155,000
- CMP (Jun 06 ′25): ₹ 139,530
- Implied Upside: + 1 % – + 10 %
Caution: MRF is running right at fair value—any margin hiccup or capex slip can wipe out the + 10 % cushion.
10) The EduInvesting Verdict: Pump Up or Pump the Brakes?
| Category | Rating | Rationale |
|---|---|---|
| Revenue Growth | ★★★★☆ | + 46 % over five years; OTR & export wings fueling moderate CAGR. |
| Margin Resilience | ★★★☆☆ | OPM 11 %→ 17 %→ 15 %; needs to stabilize at ~16 % despite commodity swings. |
| Balance Sheet | ★★★★☆ | Strong reserves (₹ 18,484 Cr), manageable debt (₹ 3,771 Cr), ROCE 14 %. |
| Valuation Comfort | ★★☆☆☆ | P/E 31.7× leaves little headroom—market expects flawless execution. |
| Dividend Payout | ★☆☆☆☆ | Yield 0.14 %; if you want yield, look at utility stocks, not the Taurean MRF. |
| Risk Profile | ★★☆☆☆ | RM volatility, working capital bloat (CCC 101 days), capex risk—higher than typical blue-chip safety nets. |
Final Take:
MRF’s “tyre of steel” performance in premium segments + export push keep it humming. However, at ₹ 1,39,530, you’re essentially bidding for “flawless execution”—a high‐stakes gamble when rubber prices can spike 50 % overnight. If MRF maintains OPM ≥ 16 %, you might get 5 %–10 % upside. But if working capital woes persist or OTR demand sputters, be ready to slide back to ₹ 1,20,000.
Tags:
MRF Ltd, Tyre Sector India, FY25 Results, Wardha Plant, TBR Leadership, OTR Expansion, Export Growth, Raw Material Inflation, Capex, CCC Days
Author: Prashant Marathe
Date: 7 June 2025
Meta Description: MRF Ltd 5-Year Recap: Revenue from ₹ 19,317 Cr → ₹ 28,153 Cr, OPM from 11 % → 15 %, PAT from ₹ 669 Cr → ₹ 1,869 Cr. Is ₹ 1,39,530 too pricey, or is MRF still on pole position?
