MRF - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.4

📊 Fundamental Analysis Summary

MRF Ltd. remains one of India’s most premium and fundamentally sound auto ancillary stocks

ROE (10.6%) & ROCE (13.6%): Decent, though not exceptional for a capital-intensive business.

PEG Ratio (0.68): Indicates undervaluation relative to earnings growth — attractive for long-term investors.

Debt-to-Equity (0.20): Very low leverage, strong balance sheet.

EPS (₹4,408): Robust earnings base.

P/E (33.9): Fairly valued compared to industry average (33.9).

Dividend Yield (0.16%): Minimal, but consistent — not a dividend play.

📈 Technical & Valuation Insights

Current Price: ₹1,49,355

DMA 50/200: ₹1,42,699 / ₹1,31,278 — price is above both, confirming bullish momentum.

RSI (57.6): Neutral zone, no overbought signal.

MACD (2,137): Bullish crossover, supports uptrend.

Volume: Slightly below average, but stable.

52-Week Range: ₹1,00,500 – ₹1,53,000 — currently near upper band.

🎯 Ideal Entry Price Zone

Based on valuation and technical trends

Fair Entry Zone: ₹1,38,000–₹1,42,000

Near DMA 50 and recent support levels

Offers margin of safety and aligns with PEG-based valuation

If price dips toward ₹1.38L, it becomes a strong long-term accumulation point.

🧭 Exit Strategy / Holding Period

If you already hold MRF

Holding Period: Minimum 5–7 years

Strong brand, pricing power, and consistent earnings

PEG and ROE suggest steady compounding potential

Exit Strategy

Partial Exit near ₹1,65,000–₹1,70,000 if valuation stretches beyond PE of 40+

Full Exit only if

ROE drops below 8%

PEG rises above 1.5

Tyre industry faces prolonged margin pressure or regulatory headwinds

Watchlist Triggers

Crude price spikes (affects input costs)

Demand slowdown in auto sector

Removal from F&O segment (already announced

1

)

🧠 Final Verdict

MRF is a premium long-term compounder with strong fundamentals, brand moat, and stable financials. While not a high-growth rocket, it offers reliability and resilience — ideal for conservative portfolios.

Would you like a comparison with other tyre stocks like Apollo Tyres or Balkrishna Industries?

1

economictimes.indiatimes.com

Edit in a page