By Aditya Raghunath
Investing.com — Shares of M.R.F. Ltd. (NS:), India’s largest tire manufacturer, closed at Rs 90,495 on February 15. The stock has moved up over 50% since September 30 when it was trading at Rs 59,972.
Brokerage firm Anand Rathi believes that MRF is due for more growth and the stock has an upside of almost 16% from current levels. Anand Rathi’s hypothesis is based on the excellent results that the tire company delivered for the third quarter of FY21 ended December 2020.
The company a 13.9% increase in income to Rs 4,61.6 crore compared to Rs 4,076 crore in the corresponding period last fiscal. Net profit saw a whopping 115.7% increase to Rs 520.5 crore compared to Rs 241.32 crore.
These numbers herald the returning demand for tires. Demand for TBR (truck and bus radial), PCR (passenger car radial), and two-wheeler tires surged in recent months and auto analysts say that this will sustain in the coming quarter’s thanks to replacement needs and demand for new vehicles. Anand Rathi says MRF is in a pole position to take advantage of this demand barring production issues.
Anand Rathi believes the fourth quarter of FY21 will see MRF beat its competitors and see extremely strong growth. It expects FY23 revenue to grow 12% year-on-year.