Below our estimate, MRF’s Q1 EBITDA fell 9% y/y to Rs10.3bn due to the lower-than-expected gross margin. We expect 9/13/19% revenue/ EBITDA/PAT growth over FY25-28 led by 1) bright outlook for replacements and exports, and the company would gain share, 2) gross margin improvement led by lower rubber prices/crude derivatives and better realization (product mix). We are positive regarding margin expansion and market-share gains. We introduce FY28e, with 9/11/15% revenue/EBITDA/PAT growth.
OutlookConsidering the brighter margin outlook and market-share gains, we maintain a Buy, at a slightly higher TP of Rs170,000, 25x Sep’27e EPS (earlier Rs165,000, 25x Mar’27e EPS).
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