MRF - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | MRF | Market Cap | 53,805 Cr. | Current Price | 1,26,948 ₹ | High / Low | 1,63,600 ₹ |
| Stock P/E | 22.4 | Book Value | 48,223 ₹ | Dividend Yield | 0.19 % | ROCE | 16.3 % |
| ROE | 12.4 % | Face Value | 10.0 ₹ | DMA 50 | 1,32,275 ₹ | DMA 200 | 1,39,196 ₹ |
| Chg in FII Hold | -0.20 % | Chg in DII Hold | -0.25 % | PAT Qtr | 669 Cr. | PAT Prev Qtr | 736 Cr. |
| RSI | 40.7 | MACD | -1,780 | Volume | 5,848 | Avg Vol 1Wk | 6,059 |
| Low price | 1,23,430 ₹ | High price | 1,63,600 ₹ | PEG Ratio | 0.43 | Debt to equity | 0.08 |
| 52w Index | 8.76 % | Qtr Profit Var | 34.4 % | EPS | 5,554 ₹ | Industry PE | 21.6 |
📊 Core Financials: MRF posted quarterly PAT of ₹669 Cr (down from ₹736 Cr), showing a decline in profitability. ROE at 12.4% and ROCE at 16.3% reflect moderate efficiency. Debt-to-equity ratio of 0.08 indicates a low leverage structure. EPS at ₹5,554 is strong, supported by consistent cash flows, but margins remain under pressure.
💹 Valuation Indicators: Stock P/E of 22.4 is slightly above the industry average (21.6), suggesting fair valuation. Book value at ₹48,223 vs CMP ₹1,26,948 shows a steep premium. PEG ratio of 0.43 indicates earnings growth potential relative to price. Intrinsic value appears supportive of long-term upside, though near-term volatility persists.
🏭 Business Model & Advantage: MRF is India’s largest tyre manufacturer with strong brand recognition, diversified product lines, and wide distribution. Competitive advantage lies in scale, technology, and market leadership. However, cyclical demand and raw material cost pressures affect profitability.
📈 Entry Zone & Holding Guidance: The stock trades below DMA 50 (₹1,32,275) and DMA 200 (₹1,39,196), showing weakness. RSI at 40.7 indicates mildly oversold conditions. A better entry zone would be closer to ₹1,20,000–₹1,23,000. Long-term holding is recommended given strong fundamentals and industry demand, though short-term volatility should be expected.
Positive
- ✅ Strong EPS at ₹5,554, reflecting robust earnings base
- ✅ Low debt-to-equity ratio (0.08), minimal leverage risk
- ✅ Market leadership and strong brand recognition in tyre industry
Limitation
- ⚠️ Quarterly PAT decline (₹736 Cr → ₹669 Cr)
- ⚠️ Moderate ROE (12.4%) and ROCE (16.3%) efficiency
- ⚠️ Dividend yield at 0.19%, limited income support
Company Negative News
- 📉 FII holding decreased by 0.20%, showing reduced foreign investor confidence
- 📉 DII holding decreased by 0.25%, reflecting cautious domestic institutions
Company Positive News
- 📈 EPS stability and PEG ratio of 0.43 indicate growth potential
- 📈 Strong brand presence and industry leadership support long-term growth
Industry
- 🌐 Tyre industry PE at 21.6, reflecting moderate valuations
- 🌐 Long-term demand driven by automotive growth and infrastructure expansion
Conclusion
🔎 MRF is fundamentally strong with robust earnings, low debt, and industry leadership. However, declining quarterly profits and moderate efficiency metrics limit near-term attractiveness. Entry near ₹1,20,000–₹1,23,000 offers better risk-reward. Long-term investors can hold confidently, supported by strong fundamentals and industry demand.
For deeper insights, you could explore a peer comparison or a valuation analysis to assess its position against competitors and intrinsic value.