NDTV Profit'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 NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
MRF Ltd.'s Q4 FY24 result was weak as higher raw material costs and operating expenses led to lower adjusted Ebitda margin of 16.2% (-100 basis points QoQ versus estimate 17%).
A provision of Rs 463.6 million, which was made in FY23, was recognized in Q4 along with the additional provision of Rs 981.4 million for FY24 to cover extended producer responsibility costs. We believe EPR costs would be recurring in nature, which, combined with rising raw material costs, could hurt Ebitda margin in the upcoming quarters.
We lower our FY25E/FY26E consolidated earnings per share by 12%/10% to factor in commodity headwind and EPR provisions.
We maintain Sell with a target price of Rs 92,000 (18 times March-26E EPS), as the stock trades at 25 times FY26E EPS (above its 10-year long period average of ~22 times), which we believe does not reflect its weakening competitive position and deteriorating return profile.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
