Demand revival to sustain healthy revenue growth for tyre makers

After a strong Q3, margins may come under pressure due to rising raw material costs

Shares of tyre manufacturers have gained 12-50 per cent over the past month, after reporting a stellar Q3 operating performance. 

MRF reported its results on Thursday, which were a strong beat on the operational front.

Operating profit rose 58 per cent over the year-ago quarter to Rs 964 crore, against the Street’s expectation of Rs 825 crore, while margins jumped nearly 600 bps to a 17-quarter high of 21.1 per cent during the same period. 

This was the second consecutive quarter of a 600-bp year-on-year (YoY) margin expansion. Profit more than doubled to Rs 512 crore, versus Rs 237 crore in the year-ago