Why Did MRF's Q1 Net Profit Drop 13% to 483 Crore?
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Synopsis
MRF Limited has reported a concerning drop in net profit for the first quarter of FY26, raising questions about its financial health. Despite a rise in revenue, the significant decrease in profit and margins has caught the attention of investors and analysts alike. What does this mean for the future of India's largest tyre manufacturer?
Key Takeaways
- Net profit decreased by 13% YoY to Rs 483.23 crore.
- Revenue rose by 7% YoY to Rs 7,560.28 crore.
- EBITDA fell by 9% QoQ to Rs 1,034 crore.
- Total expenses increased by 8% YoY to Rs 7,035 crore.
- Gross margins dropped by 300 basis points to 34.3%.
Mumbai, Aug 12 (NationPress) MRF Limited reported a net profit of Rs 483.23 crore for the April-June quarter (Q1 FY26), reflecting a 13% year-on-year (YoY) decline, as per an exchange filing on Tuesday.
In the same period last year (Q1 FY25), the tyre maker's net profit was Rs 562.55 crore. The profit also saw a quarter-on-quarter (QoQ) decline of over 2% compared to Rs 497.85 crore in the previous quarter (Q4 FY25).
On a positive note, revenue from operations increased by 7% YoY to Rs 7,560.28 crore, up from Rs 7,077.84 crore, and rose 8% QoQ from Rs 6,943.84 crore.
EBITDA (earnings before interest, tax, depreciation, and amortisation) fell by 9% from the previous quarter to Rs 1,034 crore, with margins decreasing by over 200 basis points to 13.7% from 16.1% last year.
MRF’s total expenses for Q1 FY26 reached Rs 7,035 crore, an increase of nearly 8% from Rs 6,409 crore compared to the same quarter last year and Rs 6,410 crore in the preceding quarter.
The tyre giant's gross margins dropped by 300 basis points to 34.3% from 37.3% last year, despite a 6% increase in raw material costs, amounting to Rs 4,597 crore.
During afternoon trading on Tuesday, MRF's shares experienced a slight decline. By 1:46 PM, the stock was trading at Rs 1,41,410, down 0.53% or Rs 760.
Over the last five sessions, MRF shares fell nearly 4%, and have decreased by almost 5% in the past 30 days. However, the stock has increased by more than 9% this year.
The stock's 52-week high and low values stand at Rs 1,53,000 and Rs 1,02,124.05, respectively.
Point of View
I believe it is crucial to highlight the complexities behind MRF's financial performance. While the decline in net profit raises concerns, the growth in revenue indicates that the company is still operationally robust. Stakeholders should remain informed and vigilant as MRF navigates these challenging waters.
NationPress
30/08/2025
Frequently Asked Questions
What caused MRF's net profit decline?
The decline in net profit can be attributed to increased expenses and decreased EBITDA margins despite a rise in revenue from operations.
How did MRF's revenue perform this quarter?
MRF's revenue from operations increased by 7% year-on-year to Rs 7,560.28 crore.
What are the current share prices of MRF?
As of the latest trading session, MRF shares were priced at Rs 1,41,410.
Is MRF's stock performing well this year?
Yes, MRF's stock has seen an increase of over 9% year-to-date, despite recent fluctuations.
What are MRF's gross margins for this quarter?
MRF's gross margins decreased to 34.3% from 37.3% in the previous year.
