India's most expensive stock MRF fell around three percent in trade on May 6, following the tyre-maker's earnings show for the fourth fiscal quarter of FY24.
MRF reported a 7.6 percent decline in net profit to Rs 379.6 crore during the quarter, down from Rs 410.7 crore in the year-ago period. The revenue from operations saw an 8.7 percent on-year growth to Rs 6,349.36 crore.
At 2.30 pm, MRF shares were quoting Rs 1,26,239.9 on the NSE, down by 1.8 percent.
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In a note, Elara Capital wrote that despite the recent aggressive competition, MRF regained its leadership in the domestic truck replacement segment. FY24 seems to be the peak margin for MRF and the tyre sector.
"We believe, there are limited positive triggers for the tyre industry in the current environment, while price increases in an environment of softening demand may be monitored," added the brokerage.
Elara Capital has a sell call on MRF, with a target price of Rs 1.1 lakh per share. This implied a downside of 14 percent.
"MRF’s competitive positioning in the sector has weakened over the past
few years, which reflects in the dilution of pricing power in the PCR and
TBR segments. This, coupled with the impact of the planned capex, should
limit the expansion in return ratios," said Motilal Oswal.
The brokerage also has a sell rating on the player, with a price target under Rs 1 lakh, at Rs 92,000 per share. This is implied a downside of 28 percent.
Over the past six months, shares of the company have gained around 17.8 percent. In comparison, the Nifty 50 index has advanced about 16 percent during the same time period.
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