Margin pressure may continue for MRF led by raw material costs, product mix

Analysts at Anand Rathi Research are positive on the outlook for the company as demand in TBRs, PCRs and two wheelers has started to pick up

MRF’s June quarter (Q1) performance was broadly in line with the Street’s expectations. While revenues were up 70 per cent year-on-year (YoY), they declined by 13 per cent sequentially. However, it trailed rival Apollo Tyres, which reported a 80 per cent YoY growth and a 11 per cent sequential decline.
 
The sequential drop was caused by double-digit decline in demand from automakers, but the replacement segment fared better. Both companies, though, benefited from a strong recovery in exports.
 
In terms of revenue growth, MRF trailed peers Apollo Tyres and Ceat in financial year 2020-21 (FY21) and that appears