MRF Q2 Review: Brokerages Hike Target Price — Here's Why

Brokerages have offered mixed views on MRF Ltd. after the tyre manufacturer posted its second quarter earnings for the financial year ending March 2026, in which profit saw a double-digit growth.

MRF Ltd.'s profit rose 11.7% to Rs 526 crore in the September quarter. This is in comparison to the profit of Rs 471 crore in the previous quarter of this fiscal, according to its stock exchange notification on Friday.

Revenue advanced by 7.2% year-on-year for the three months ended September, reaching Rs 7,379 crore. Operating income, or earnings before interest, taxes, depreciation, and amortisation rose 11.3% year-on-year to Rs 1,126 crore. The Ebitda margin expanded to 15.3%.

• Revenue rises 7.2% at Rs 7,379 crore versus Rs 6,881 crore.

• Ebitda rises 11.3% to Rs 1,126 crore versus Rs 1,011 crore.

• Margin at 15.3% versus 14.7%.

• Net Profit rises 11.7% to Rs 526 crore versus Rs 471 crore.

• To pay interim dividend of Rs 3 per share.

Kotak has come out with a note on MRF in light of its second quarter earnings, in which the brokerage firm has maintained a 'sell' rating while hiking target from Rs 1,22,000 to Rs 1,27,500.

Kotak believes MRF endured a relatively weak quarter, noting that revenue growth has begun to cool off after a strong run.

The firm added that although MRF is expected to outperform peers, the pace of growth may appear slow.

A recent correction in crude oil and natural rubber prices may aid margins, but Kotak believes MRF's rich valuations are a concern.

While declining input costs should help support profitability, the stock trades at levels that appear quite expensive relative to its growth.

CLSA, meanwhile, has maintained an 'outperform' rating on MRF while hiking its target price from Rs 1,63,431 to Rs 1,78,536.

CLSA's bullish calls on MRF comes on the back of falling input costs, which the firm believes could significantly boost margins going forward and lift profitability.

The brokerage firm also pointed out MRF's strong market position and capital efficiency, which it believes could generate strong cash flow.