MRF Q4 Results Review: Anand Rathi Maintains 'Buy' Rating On Robust Margins, Hikes Target Price

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Anand Rathi Report

Exceeding our estimate, MRF Ltd.’s Q4 Ebitda grew 18% y/y to Rs 10.4 billion due to the higher-than-expected gross margin. The outlook for original equipment manufacturer/replacements/exports is bright and the company would gain share.

Ahead, we expect gross margin improvement, led by lower international rubber prices/crude derivatives and better realization (product mix and selective price hikes).

We expect 10%/16%/24% revenue/Ebitda/PAT growth over FY25-27. We remain positive regarding margin expansion and market-share gains. The stock quotes at 25x/21x FY26e/27e EPS.

We maintain a Buy, at a slightly higher target price of Rs 1,65,000 (earlier Rs 1,60,000), 25x FY27e P/E (25x FY27e).

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