Tyre maker MRF Ltd. is stepping up price increases and cost-saving measures to counter the impact of soaring raw material prices and persistent logistics disruptions, even as the company expects cost pressures to remain elevated.
The company in a statement said that global uncertainties had triggered a steep increase in raw material prices, adversely affecting profitability during the September quarter of FY27. However, price hikes and cost-saving initiatives helped mitigate some of the pressure.
MRF also flagged continued uncertainty in commodity markets, warning that volatility and supply-chain disruptions could persist.
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"Anticipate continued disruptions and volatility in commodity markets. Raw material and logistics costs are expected to remain elevated. Will continue to take measured steps to address these challenges," the company said in its commentary on the quarter.
The company's remarks come against the backdrop of a sharp decline in profitability despite healthy revenue growth. MRF reported a 27.8% year-on-year (YoY) fall in consolidated net profit to Rs 369 crore in Q2FY27, compared with Rs 512 crore in the corresponding quarter last year.
Revenue from operations, however, rose 17.6% annually to Rs 8,524 crore from Rs 7,250 crore in Q2FY26, indicating that higher sales were not enough to offset the pressure on margins.
At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) declined 16.3% to Rs 913 crore, against Rs 1,090 crore a year ago. EBITDA margin contracted sharply to 10.7% from 15% in the year-ago quarter.
The decline in operating profitability underscores the pressure that rising input costs can exert on tyre manufacturers, even when revenue growth remains strong. MRF's pricing actions and cost-control measures are aimed at cushioning the impact, although the company's outlook st ggests that the operating environment may remain challenging.
Alongside its quarterly results, MRF's board declared an interim dividend of Rs 3 per equity share of face value Rs 10 each for FY27, representing a 30% payout.
The company has fixed November 17, 2026, as the record date to determine shareholders eligible for the dividend. The payment will be made on or after December 1, 2026.
MRF shares settled 1.29% lower at Rs 1,25,070.85 on November 9, underperforming the BSE Sensex, which ended 0.13% higher at 81,106.65.
The stock has gained 6.92% over the past week but remains under pressure over longer periods, declining 2.38% in a month and 6.79% over three months. It is down 17.41% so far in 2026.
Over the past year, MRF shares have fallen 21.28%, compared with a 2.54% decline in the Sensex. Over five years, however, the stock has gained 59.29%, outperforming the benchmark's 34.21% advance.
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