Chennai: Tyre maker MRF Ltd
posted a 11.7% increase in net profit during the quarter ended
September from a year earlier, helped by lower rubber prices, but missed
analyst estimates due to higher tax expenses.
Net profit rose to Rs.184.1 crore in the period from Rs.164.7 crore a year ago, missing Bloomberg analysts’ profit expectations of Rs.208.9 crore.
Net sales at the Chennai-based company rose 4% to Rs.3,452.2 crore, above analysts’ estimate of Rs.3,184.8 crore.
Tax expenditure rose 61.6% to Rs.118 crore in the September quarter.
“Profits are in line with our estimates, except for the tax expenses, which rose unexpectedly in the quarter,” said Ajay Shetiya, an analyst with Centrum Broking Ltd.
As has been the case for the last five quarters, the cost of raw material for the firm fell 5% to Rs.2,046 crore in the quarter.
Prices of natural rubber, which makes up for 40% of the cost of a tyre, have been falling from January 2012, when the price was Rs.195.67 per kg. Since then, prices have fallen 22% to Rs.151.72 a kg till date. The September quarter saw rubber prices average Rs.188.64 a kg.
India’s tyre firms have stocked up on rubber at low
prices, locking in healthy margins. Natural rubber imports from April to
September jumped 59% from a year earlier to 179,292 tonnes.
The operating margin for MRF improved to 13.8% in the quarter from the 11.7% in a year ago.
“We expect tyre companies to benefit from low rubber prices for the next two quarters at least,” said Shetiya.
Shares of the company fell 0.98% to Rs.17,558.55 on the BSE, while the exchange’s benchmark Sensex rose 0.56% to 20,534.91 points at the close of trading.
Muntazir Alam
pgdm 1st sem
IIMT College of management
No comments:
Post a Comment