Shares of MRF hit a new high of Rs 78,234, up 2% on the BSE. The stock of tyre company gained 13% or Rs 9,045 from its recent low of Rs 69,189 on March 23, 2018. On comparison, the S&P BSE Sensex was up 4.3% during the same period.
So far in the calendar year 2018, MRF shares have beat the market by gaining 8% against 0.05% decline in the benchmark index. In past nine consecutive calendar years, the stock had outperformed the market. Since January 2008, MRF zoomed 3,791% from Rs 2,003 against 252% rise in the Sensex.
Analysts at Elara Capital reiterate ‘Accumulate’ on MRF with a target price of Rs 80,543 based on 16x (unchanged) FY20E EPS, given its market leadership, strong distribution network and healthy balance sheet compared to peers.
“MRF’s key strength of its exclusive distribution network is evident from its smooth transition to GST compared to its peers. Further, there has been an increased focus on expansion of distribution network of MRF in recent quarters which would drive its revenue growth in coming years. MRF has now increased supplies of its 2W tyres which have been in shortage in recent years as is now flexing its brand muscle for market share gains,” the brokerage firm said in Q3 results update.
Analyst at Anand Rathi Share and Stock Brokers has ‘buy’ rating on MRF with a target price of Rs 80,045 as the brokerage firm expects better revenue growth and stable rubber prices augur well for MRF’s margin expansion in coming quarters.
Government announced increase in customs duty on truck and bus radials (TBR) imports from 10% to 15% in union budget FY19 which augurs well for tyre companies. While incremental benefit will be limited owing to already low imports post Goods and Services Tax (GST) and Anti-dumping duty (ADD); it gives further confidence in sustained depressed Chinese imports, it added.
Date
MRF
Sensex
MRF*
Sensex*
12/04/2018
78234
34041
8.12
-0.05
31/12/2017
72357
34057
47.95
27.91
31/12/2016
48906
26626
22.64
1.95
31/12/2015
39878
26118
5.17
-5.03
31/12/2014
37919
27499
95.82
29.89
31/12/2013
19364
21171
51.06
8.98
31/12/2012
12819
19427
83.67
25.70
31/12/2011
6979
15455
-3.10
-24.64
31/12/2010
7203
20509
19.13
17.43
31/12/2009
6046
17465
201.82
81.03
31/12/2008
2003
9647
-72.16
-52.45
31/12/2007
7196
20287
67.62
47.15
31/12/2006
4293
13787
56.20
46.70
31/12/2005
2748
9398
13.57
42.33
31/12/2004
2420
6603
5.17
13.08
31/12/2003
2301
5839
155.68
72.89
31/12/2002
900
3377
26.70
3.52
31/12/2001
710
3262
-41.64
-17.87
31/12/2000
1217
3972
-44.37
-20.65
31/12/1999
2188
5006
52.99
63.83
31/12/1998
1430
3055
-26.03
-16.50
31/12/1997
1933
3659
-32.17
18.60
31/12/1996
2850
3085
62.86
-0.81
31/12/1995
1750
3110
-25.53
-20.79
MRF price on BSE in Rs at 01:07 pm.
*Yearwise returns in %
