MRF - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.2

MRF is a fundamentally strong company with consistent profitability, low debt, and a dominant market position. While valuation is slightly stretched, its brand strength and operational resilience support long-term holding.

📊 Financial Overview

• Revenue: ₹28,632 Cr (TTM) — steady growth in the tyre segment

  Value Research

• Profitability: PAT of ₹484 Cr this quarter, slight dip from ₹498 Cr
• Margins: ROCE at 13.8% and ROE at 10.5% — healthy but not industry-leading
• Debt Profile: Low debt-to-equity ratio of 0.13 — financially stable
• EPS: ₹4,113 — reflects strong earnings power

📈 Valuation Metrics

• P/E Ratio: 38.3 — above industry average of 31.3, indicating premium pricing
• P/B Ratio: ~3.7 — reasonable given brand and asset base
• PEG Ratio: 0.75 — suggests fair valuation relative to growth
• Intrinsic Value: Estimated near ₹1,50,000–₹1,55,000 based on earnings and sector multiples

🏢 Business Model & Competitive Edge

• Segment Leadership: MRF is India’s largest tyre manufacturer with strong OEM and replacement market share
• Brand Strength: Premium pricing supported by brand equity and quality perception
• Diversification: Presence in tubes, flaps, and conveyor belts adds revenue stability

📌 Entry Zone Recommendation

• Suggested Entry: ₹1,50,000–₹1,53,000 — near DMA50 support
• Technical Indicators: RSI at 54 (neutral), MACD positive — bullish momentum

📈 Long-Term Holding Guidance

• MRF is a resilient business with strong fundamentals and brand moat
• Ideal for long-term holding despite short-term valuation concerns

✅ Positive

• Strong brand and market leadership
• Consistent profitability and low debt
• EPS and cash flows support valuation

⚠️ Limitation

• High P/E ratio compared to industry
• Quarterly profit dipped 13.9%
• FII holding declined by 0.40%

📰 Company Negative News

• No major negative news reported recently

🌟 Company Positive News

• MRF hit fresh all-time high as tyre makers passed on GST cut benefits

  Stock Analysis

• Stock rallied over 6% in recent weeks due to strong momentum

  Simply Wall St

🏭 Industry

• Tyre industry P/E at 31.3 — MRF trades at a premium
• Sector driven by auto demand, exports, and raw material trends

🧾 Conclusion

• MRF is a premium stock with solid fundamentals and brand strength
• Accumulate on dips for long-term growth; short-term upside may be limited due to valuation

Sources

Value Research

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