Margins likely to have peaked out

Company
11 Mar 2024
5 Min read 
  • MRF's 3QFY24 operating performance was below estimates due to higher raw material costs and expenses.
  •  Margins are likely to have peaked out at current levels and are expected to remain stable over FY24-26E.
  •  FY24E EPS is lowered by 4% due to weak volume growth, while FY25E EPS remains unchanged.
  •  MRF's competitive positioning in the sector has weakened, leading to a loss of market share.
  •  The stock is trading at a high valuation and does not reflect its weakening competitive position.
  •  Sell rating is reiterated with a target price of INR1,06,760.
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