MRF Ltd has reported a decline of 35% YoY in its net profit to Rs 641 m for FY00 as compared to Rs 986.7 m for FY99. This is despite a 2% growth in turnover in FY00.
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted number of shares
Diluted Earnings per share
* Year ended 30th September 1999 and 2000
The recession across all sectors in the automobile industry has resulted in low demand from the tyre industry. MRF Ltd India's largest radial manufacturer as a result too has reported a lower turnover growth. Higher raw material expenses in the current year at Rs 1,093 m grew by 6% YoY as compared to Rs 1,036 m in FY99. As a percentage of sales raw material expenses have gone up from 46% in FY99 to 49% in FY00. The major components of raw material, rubber and carbon black have both seen an increase in prices in the current year. All these factors have resulted in a decline in the company's net profit for FY00.
As a result of change in method of valuation of inventory, the value of inventories and the net profit has declined in the current year by Rs 66 m. This too has contributed to the decline in net.
In FY00 to expand its client base the company has turned to other segments for business. They have received orders from State Transport Undertakings and higher orders from the army. The company's exports went up from Rs 1,513 m in FY99 to Rs 1,733 in FY00 a growth of 15%, this helped the companys' turnover and bottomline to some extent, which reeled under declining domestic volumes.
On the current price of Rs 1,164 MRF is trading at 7.7x FY00 EPS of Rs 151.We expect the share price to be lacklustre on the back of the above results. Also there are no signs of improvement for the 1st quarter FY01 results which are expected in January 2001.
More Views on News
Sorry! There are no related views on news for this company/sector.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407