MRF, one of India's leading tyre manufacturers, has made headlines as its share price soared beyond the remarkable Rs 1-lakh mark. This significant milestone comes on the heels of the company's impressive Q4 performance, with a net profit of Rs 410.66 crore compared to Rs 156.78 crore in the corresponding quarter of the previous year.
At its peak, the MRF share price touched an all-time high of Rs 1,00,439.95, reflecting the market's recognition of the company's exceptional performance. Although it has since dipped below the Rs 1-lakh mark, the share is currently trading at Rs 99,969.95, showing a 1.01 percent increase from today's opening price. In comparison, the NIFTY, NSE's index, has risen by 93.05 percent to reach 18,694.55.
The remarkable surge in MRF's share price can be attributed to its notably low equity base of Rs 4.24 crore, with the promoter group holding 27.84 percent. Moreover, in the fiscal year 2022-23, the company distributed a dividend of Rs 175 per share (1,750 percent), adding to the appeal for investors.
Anticipation of MRF's share price crossing the Rs 1-lakh mark grew following the company's announcement of its 2022-23 results in May. The impressive net profit of Rs 410.66 crore in the fourth quarter, a substantial increase of 163 percent from the previous year's corresponding quarter, played a significant role.
This quarter's net profit accounted for half of the full year's net profit, reaching Rs 816 crore. The market responded positively, with the MRF share price rising by 2 percent (Rs 4,908.10) to close at Rs 93,505, foreshadowing a potential leap across the Rs 1-lakh milestone.
MRF attributes its robust performance to the easing of raw material prices. Rahul Mammen Mapillai, the company's Managing Director, stated that "the reduction in commodity prices has led to a decline in raw material costs for this quarter, which helped to improve our profitability." This favorable market condition has played a crucial role in boosting MRF's financial performance and investor confidence.
Investors and market observers are keeping a close eye on MRF as its share price continues to fluctuate. While the record-breaking crossing of the Rs 1-lakh mark is noteworthy, it is equally important to monitor the company's sustained growth and its ability to leverage favorable market conditions. As MRF continues to innovate and adapt to market dynamics, investors can seize potential opportunities in the ever-evolving landscape of the tyre manufacturing industry.