MRF, the tyre maker known for having the highest-priced stock in India, has become even more expensive in recent months. The company’s share price has risen sharply, climbing 54% from its March lows. This dramatic rise has pushed the stock to a new all-time high of ₹1,63,600 for the first time in October.
Even after cooling slightly, the stock continues to trade around ₹1,57,000+, which is still far above its earlier levels this year. This strong rally has surprised many investors, especially because MRF was already seen as a premium stock. Now, with the latest jump, it has become even more talked about in the market.
The company crossed the ₹1,00,000 mark in June 2023. Since then, it has continued to climb and remains unmatched in the Indian market as the single most costly stock.
Mixed reactions from market experts
Although the stock has risen sharply, some market experts feel the rally may not last. They say the current price is too high compared to the company’s earnings and note that MRF is trading above its usual 10-year valuation levels, making it look expensive against its peers.
Analysts also point out that MRF’s competitive strength has weakened in key tyre segments, with reduced pricing power in the PCR and TBR markets due to rising competition.
Some research firms believe that even if crude and natural rubber prices fall, MRF may not see a big jump in margins because it is focused on regaining lost market share.
Two major brokerages have kept a “Sell” rating, expecting the stock to fall to around ₹1.21 lakh or ₹1.28 lakh, both below current levels. A global brokerage, however, sees more upside, showing that opinions remain divided, though most local experts appear cautious.
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MRF’s September quarter numbers explained
MRF announced its financial results for the September quarter, also known as Q2, and the numbers showed some improvement. The company reported a consolidated net profit of ₹525.64 crore, which is an 11.7% increase from the same quarter last year. This means the company earned more money than before, though the rise was not very large.
MRF’s revenue from operations for the quarter stood at ₹7,378.72 crore, compared to ₹6,881.09 crore in the same period last year. This shows that the company sold more products and had higher overall business activity.
The company’s EBITDA, which is a measure of operating performance, increased from ₹1,011 crore to ₹1,126 crore. This pushed its operating margin to 15%, which was better than many expected. However, some analysts still felt the quarter did not show strong growth in key areas. They also said that revenue growth was slower than before.
These mixed results are one of the reasons why some experts believe the stock’s sharp rally may not match the company’s performance on the ground.
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A look at MRF’s long-term stock journey
MRF has a long and interesting journey in the Indian stock market. The company began this year at around ₹1,30,000 per share. From there, it has gained around 21% so far, making it one of the better-performing large stocks in 2024.
Over the last 16 years, MRF has delivered positive returns in 12 different years, showing that it has often rewarded investors. One of its best years was 2014, when the stock jumped an impressive 96%. Another strong year was 2017, when it gained 48%. Over the entire period, the stock has delivered a massive growth of 7,746%, making it one of the strongest wealth creators in India.
Its high price and steady long-term rise have made it a unique stock in the Indian market. Even today, it remains the only stock to have crossed the ₹1 lakh mark, a milestone that made history in June 2023.