Accumulate MRF; target of Rs 81712: Dolat Capital

Dolat Capital recommended accumulate rating on MRF with a target price of Rs 81712 in its research report dated August 10, 2018.

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September 18, 2018 / 13:47 IST

26 Aug, 2025 12:21

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Dolat Capital's research report on MRF

MRF posted weak topline growth of 8.1% YoY at ` 38.6 bn for the quarter ended Q1FY19 along with gross and EBITDA margins of 39.8% and 15.4% respectively. The gross and EBITDA margins for the quarter Q1FY19 improved by 735 bps and 773 bps respectively on an unfavorable period of Q1FY18. We believe the pressure in the top line growth for MRF was due to the increasing intensity of competition in the tyre space where realizations per unit would have declined and unfavorable product mix due to increasing demand from the CV segment. The stock has corrected nearly 10% in the last 1 month and hence we reiterate our Accumulate rating with a target price of ` 81,712.

Outlook

MRF is expected to bounce back on the revenue growth front with new product offerings and increased marketing efforts. Although lower top-line growth is expected to put some pressure on the stock, the higher comparative margins will help protect the downside. Leadership position in the high margins segments will enable MRF to protect valuations. We reiterate our Accumulate rating with a target price of ` 81,712.

For all recommendations report, click here