Indian tyremaker MRF's profit soars on cooling rubber prices, higher demand
CHENNAI (Reuters) - Indian tyremaker MRF Ltd on Wednesday reported its fourth-quarter profit more than doubled, as rubber prices cooled and higher vehicle sales prompted increased demand for tyres.
Standalone profit from continuing operations rose nearly 161% to 4.11 billion Indian rupees for the quarter ended March 31, according to an exchange filing.
Total expenses rose roughly 5% in the quarter, slowing from a 23% growth in the first nine months of the fiscal year, as rubber prices eased 3% sequentially in the fourth quarter according to a preview note by Elara Capital analysts.
Analysts expect tyremakers including MRF to have booked profits amid a fall in raw material prices, with price increases they had put in place over the last year tipped to further drive bottom lines.
Revenue from operations rose 10% to 57.25 billion rupees.
Indian automakers recorded higher sales in the March quarter as consumers snapped up passenger and commercial vehicles ahead of price increases coming on the back of implementation of tighter fuel emission norms.
However, while wholesale commercial and passenger vehicle sales growth moderated in April, analysts expect demand for replacement tyres would provide cushion to tyremakers including MRF, Apollo Tyres Ltd, JK Tyre & Industries Ltd and CEAT Ltd in the coming quarters.
Shares of MRF, which started as a toy balloon manufacturer a year before India's independence, rose more than 4% post-results. The company declared a final dividend of 169 rupees per share for the fiscal year 2023.
(Reporting by Praveen Paramasivam in Chennai; Editing by Varun H K)