MRF share price in focus: Tyre make MRF, known for holding the title of the most expensive stock in the Indian stock market, has witnessed a further increase in its value, making it even pricier, as the recent rally has led it to surge 54% from its March lows to trade at the current level of ₹157,165.
For the first time in October, the stock crossed the ₹1.6 lakh mark to hit a fresh record high of ₹1,63,600 apiece, marking another key milestone in its sustained rally.
However, analysts believe the current rally may reverse in the near term as the company’s September quarter numbers failed to impress them, even though margins came in higher than their estimates.
Brokerages see MRF share price falling to ₹1.21 lakh
Domestic brokerage firm Motilal Oswal said that the recent rally in the MRF share price has made it trade at 32.5x and 27.6x FY26E and FY27E EPS, above its 10-year LPA of 25x, which it believes is expensive when compared to peers.
According to the brokerage, MRF’s competitive positioning in the sector has weakened over the past few years, which is reflected in the dilution of its pricing power in the PCR and TBR segments.
MRF is likely to continue focusing on recovering its lost share across segments. This is anticipated to limit margin upside, even in a falling input cost scenario. Overall, it expects MRF to post a 13% earnings CAGR over FY25–28.
Thus, the brokerage retained its ‘Sell’ rating on the stock with a target price of ₹1,21,162 apiece, which suggests a 23% downside from the stock’s latest closing price.
Similarly, Kotak Securities retained its Sell rating, revising its target price slightly upward to ₹1.28 lakh from ₹1.22 lakh. It noted that MRF’s Q2 performance was relatively weak and that valuations remain expensive.
While revenue growth has moderated, Kotak said softer crude and natural rubber prices should aid margins. The brokerage expects MRF to outperform peers, albeit at a slower pace.
MRF September quarter performance
The company, on Friday, reported an ₹525.64 crore in Q2FY26″>11.7% rise in consolidated net profit at ₹525.64 crore in Q2FY26. It had posted a consolidated net profit of ₹470.7 crore in the same quarter last fiscal.
Its consolidated revenue from operations in the second quarter stood at ₹7,378.72 crore, as against ₹6,881.09 crore in the corresponding period a year ago. MRF’s EBITDA grew to ₹1,126 crore from ₹1,011 crore, with margins coming in at 15%.
MRF share price journey
Starting the year at ₹1,30,000 apiece, MRF’s shares have surged 21% to date. The stock achieved the milestone of crossing the ₹1,00,000 mark in June 2023, becoming the first Indian company to do so.
Over the past 16 years, the stock has closed 12 years with positive performance, with CY14 being the standout year with a remarkable rally of 96%, followed by 48% in CY17. Throughout this period, the stock has exhibited an impressive growth of 7,746%.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
