Neutral MRF; target of Rs 80,000: Motilal Oswal

Motilal Oswal's research report on MRF

MRF’s 1QFY23 revenue was a beat, but margin was impacted due to cost pressures (RM cost pressure and higher other expenses). Lower other income impacted PAT. The industry is taking gradual price increases to dilute the impact of severe cost inflation.  We reduce our FY23 EPS estimate by 5.5% to account for margin pressure and upgrade out FY24 EPS estimate by ~12% to factor in lower commodity costs, in turn improving margin.

Outlook

We maintain our Neutral rating with a TP of INR80,000.