Shares of MRF Ltd, India’s most expensive stock gained ₹ 2,160.20 per share or 2.31% on Thursday to reach an intraday high of ₹ 95,760.00 apiece on the National Stock Exchange (NSE). Its share price was merely 0.25% shy of reaching its 52-week high of ₹ 96,000 per share that it reached on 07 November 2022.
On the Bombay Stock Exchange (BSE), its shares gained 2.33% to reach an intraday high of 95,711.65 apiece, which is also 0.25% away from its 52-week high. Moreover, it is merely 2.91 away from its record high of ₹ 98575.9 per share, which it reached on 11th February 2021.
MRF Ltd is engaged in the manufacturing and sale of tyres, tubes, flaps, tread rubber and rubber chemicals.
Its share price gained more than 8% in two days after the company declared its quarterly and annual results. On a consolidated basis, its net profit increased by 106.20% to ₹ 340.67 crores in the quarter ending March 31, 2023 (Q4FY23), against ₹ 165.21 crores reported in the corresponding quarter last year, on a consolidated basis. It reported a total income of ₹ 5,911.51 crores, which is 3.42% higher than ₹ 5,715.91 crores reported in the corresponding quarter last year (Q4FY22).
For the full year, its consolidated total income grew by 18.48% to ₹ 23261.17 crores in FY23 against ₹ 19633.71 crores reported last year (FY22). Its profit increased by 14.90% to ₹ 768.96 crores in FY23, against ₹ 669.24 crores reported in FY22.
It said that its exports for FY23 increased to ₹ 1877 crores, against ₹ 1791 crores in the previous year. In fact, it is a matter of pride that Brand Finance, which is one of the world’s leading independent brand valuation and strategy consultancy, with headquarters in London, has rated MRF as the second strongest Tyre brand in the world.
Moreover, its board recommended a final dividend of ₹ 169.00 per share or 1690% of its face value of ₹ 10. MRF has already paid two interim dividends of ₹ 3 each per share. This takes the total dividend paid for the year to ₹ 175.00.
MRF is a mid-cap company with a market capitalization of ₹ 39,680 crores. It has a low return on equity of 5.35% but an ideal debt-to-equity ratio of 0.20. Its shares were trading at a price-to-earnings ratio (P/E) of 51.60, which is significantly higher than the industry P/E of 34.74, indicating that it is overvalued as compared to its peers.
Retail investors hold a 47.11% stake in the company, followed by promoters with 27.84%, foreign institutions with 18.05%, mutual funds with 6.83% and other domestic institutions with 0.17%.
Written by Simran Bafna
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