MRF reports a 40% fall in standalone Q3 net on higher costs, revenue up

Leading tyre maker MRF Ltd has reported a 40 per cent decline in standalone net profit at ₹307 crore for the quarter that ended December 31, 2024, when compared to ₹508 crore in the year-ago period.

The Board of Directors declared a second interim dividend of ₹3 per share (30 per cent) for the financial year ending March 31.

The input cost environment was challenging due to rising commodity prices. Higher raw material costs (including natural rubber and crude-based raw materials) and a stronger dollar contributed to an overall increase in expenses, said a company statement.

During the interaction with businessline at the Bharat Mobility Global Expo 2025, Arun Mammen, Vice Chairman & Managing Director, of MRF highlighted the rising cost of raw material, noting that crude oil was priced at about $80 per barrel, up from $70 six months ago. He also pointed out that the rupee-dollar exchange rate surpassed 86, resulting in a 4-5 per cent devaluation, which has significantly impacted input costs, especially that of raw materials.

Raw materials constitute more than 60–65 per cent of costs. Fluctuating crude prices and the rupee’s devaluation are driving up the costs, since a portion of the materials is imported.

Total expenses of the company rose to ₹6,557 crore in Q3FY25 from ₹5,445 crore in the same period last year.

MRF’s revenue from operations was higher at ₹6,883 crore as against ₹6,048 crore. Total income stood at ₹6,980 crore (₹6,124 crore in Q3FY24).

Its consolidated total income increased by 14 per cent to ₹7,099 crore in Q3, as against ₹6,240.08 crore in the year-ago period. Provision for tax for the quarter was ₹108.72 crore. After making tax provisions, the consolidated net profit for the December quarter was at ₹315.46 crore when compared with ₹510 crore a year ago.

Sales growth was fueled by higher replacement demand, institutional sales, and exports. The strong growth in export sales witnessed during the earlier quarters of the financial year continued during the third quarter. The company continues to be a significant player in the electric vehicle segment and supplies tyres to major manufacturers of electric vehicles, it said.