MRF net profit zooms 115% despite odds

Amid concerns over the rise in raw material prices and steep increase in tyres imports from China, leading tyre marker MRF has posted healthy growth in revenues and profit for the year ended September 30, 2007 (FY07).

The company posted 115 per cent growth in net profit at Rs 171.78 crore, as compared with Rs 79.91 crore in FY06. "The growth in net profit was partially due to the impact of the 2005-06 price hike, change in product mix and stabilisation of rubber prices," a company official said.

Profit before tax stood at Rs 260.96 crore, as against Rs 99.81 crore (including exceptional income of Rs 36.41 crore) in the previous year.

The company's shares, however, closed 5.93% down at Rs 7,534.30 on the Bombay Stock Exchange today.

"The rise in profits has been achieved despite steep increase in input costs," a company release said.

The company's gross sales stood at Rs 5,041.20 crore, making it the first Indian tyre company to cross the Rs 5,000-crore mark, on the back of sales growth in the commercial, car radials and two-wheeler segments. MRF posted gross sales of Rs 4,248.31 crore in FY06.

"As we focus more on the aftermarket, we are able to tide over slowdowns in some way and post better sales growth," said a company official.

Net sales of the company increased 18 per cent to Rs 4,411 crore from Rs 3,738.85 crore a year earlier. Exports during the year stood at Rs 492.34 crore from Rs 502.55 crore last year.

The company's board of directors has recommended a dividend of 140 per cent for the financial year. With two interim dividends of 30 per cent each paid earlier in the year, the aggregate dividend for the year stands at 200 per cent.