MRF - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | MRF | Market Cap | 56,816 Cr. | Current Price | 1,33,806 ₹ | High / Low | 1,63,600 ₹ |
| Stock P/E | 25.5 | Book Value | 45,019 ₹ | Dividend Yield | 0.18 % | ROCE | 13.8 % |
| ROE | 10.5 % | Face Value | 10.0 ₹ | DMA 50 | 1,41,960 ₹ | DMA 200 | 1,43,696 ₹ |
| Chg in FII Hold | -0.09 % | Chg in DII Hold | 0.12 % | PAT Qtr | 736 Cr. | PAT Prev Qtr | 512 Cr. |
| RSI | 40.4 | MACD | -2,787 | Volume | 5,710 | Avg Vol 1Wk | 6,190 |
| Low price | 1,07,389 ₹ | High price | 1,63,600 ₹ | PEG Ratio | 0.50 | Debt to equity | 0.11 |
| 52w Index | 47.0 % | Qtr Profit Var | 140 % | EPS | 5,123 ₹ | Industry PE | 24.8 |
📊 Financial Overview
- Revenue & Profitability: PAT rose from 512 Cr. to 736 Cr. QoQ, showing strong earnings growth. EPS at 5,123 ₹ is robust.
- Margins & Returns: ROE at 10.5% and ROCE at 13.8% are moderate, reflecting average capital efficiency.
- Debt & Liquidity: Debt-to-equity ratio of 0.11 indicates low leverage, enhancing financial stability.
- Cash Flow: Strong profitability supports reinvestment, though margins remain modest compared to valuation.
💹 Valuation Metrics
- P/E Ratio: 25.5 vs Industry PE of 24.8 → Fairly valued.
- P/B Ratio: ~3.0 (Price 1,33,806 ₹ / Book Value 45,019 ₹) → Reasonable relative to assets.
- PEG Ratio: 0.50 → Attractive, reflecting growth at a fair valuation.
- Intrinsic Value: Current price is close to fair value, supported by earnings growth.
🏢 Business Model & Competitive Advantage
MRF is India’s leading tire manufacturer with strong brand recognition, wide distribution, and diversified product offerings. Its scale and market leadership provide a competitive edge, though the industry is cyclical and sensitive to raw material costs and automotive demand.
📈 Entry Zone & Long-Term Guidance
Technically, RSI at 40.4 and negative MACD suggest weakness. A good entry zone would be 1,25,000–1,30,000 ₹ (near support levels). Long-term holding is advisable given strong fundamentals and brand leadership, but investors should monitor cyclical risks.
✅ Positive
- Strong QoQ PAT growth (736 Cr. vs 512 Cr.).
- Low debt-to-equity ratio (0.11).
- PEG ratio of 0.50 indicates attractive growth valuation.
- Strong brand leadership in the tire industry.
⚠️ Limitation
- ROE (10.5%) and ROCE (13.8%) are moderate compared to peers.
- Dividend yield at 0.18% offers minimal income support.
- Stock trading below 50 DMA and 200 DMA, showing technical weakness.
📉 Company Negative News
- FII holdings decreased (-0.09%), showing reduced foreign confidence.
- Stock corrected from 1,63,600 ₹ to 1,33,806 ₹.
📈 Company Positive News
- Quarterly PAT surged significantly.
- DII holdings increased (+0.12%), signaling domestic support.
🏭 Industry
The tire industry benefits from automotive demand, infrastructure growth, and exports. However, it remains cyclical and sensitive to raw material costs (rubber, crude derivatives). Industry PE at 24.8 highlights MRF’s fair valuation relative to peers.
🔎 Conclusion
MRF is fundamentally strong with robust earnings, low debt, and fair valuation. While technical indicators show weakness, its market leadership and growth prospects make it a solid long-term investment. Accumulation near 1,25,000–1,30,000 ₹ is recommended for investors seeking steady returns.