BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
MRF Ltd.'s Q1 FY24 performance surprised positively, led by strong revenue growth versus peers and benign cost pressure aiding margin expansion.
As Q1 margin largely reflects the benefit of softening raw material and price hikes, we believe it to moderate in the coming quarters to ~16-16.5% range.
We upgrade MRF's FY24E/FY25E earnings per share by 38%/20% to factor in better-than estimated revenue and benefits of low raw material costs.
We maintain 'Sell' with a revised target price of Rs 94,500 (18 times September-25E EPS), as the stock trades at 21.7 times FY25E EPS (inline with its 10-year LPA), which does not reflect its weakening competitive position and similar return ratios versus its peers.
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