MRF Q2 Profit Falls 23% to Rs 417 Cr

New Delhi: Tyre maker MRF Ltd on Tuesday posted a 22.8 per cent drop in net profit to Rs 417.19 crore for the July-September quarter despite double-digit revenue growth, as higher raw material costs hit the operating performance.

The Chennai-based company clocked Rs 540.13 crore in consolidated net profit a year ago, according to an exchange filing.

Its revenue from operations rose 17.4 per cent to Rs 8,660.19 crore compared to Rs 7,378.72 crore in the year-ago period, it added.

“The company delivered strong double-digit sales growth in the second quarter. We were able to capitalise on sustained demand for the company’s products from both OE and replacement segments,” MRF said in a press release.

Its total expenses grew 21.8 per cent to Rs 8,269.77 crore in the September quarter from Rs 6,788.55 crore a year ago.

Cost of materials rose 43.2 per cent to Rs 6,552.57 crore from Rs 4,577.49 crore.

The steep increase in prices of raw materials due to global uncertainties adversely affected profitability during the quarter. Price increases and cost-saving measures helped to mitigate cost pressures, MRF said.

It anticipates continued disruptions and volatility in commodity markets. Raw material and logistics costs are expected to remain elevated. “We will continue to take measured steps to address these challenges”, the company added.

Meanwhile, the company’s board also declared an interim dividend of Rs 3 per share. MRF has fixed November 17 as the record date for payment of the dividend on or after December 1.

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