MRF: India’s most expensive stock hits another record high, up 28.5% in CY23 so far
Over the past 15 years, the stock has closed 11 years with positive performance, with CY14 being the standout year with a remarkable rally of 96%, followed by 48% in CY17.
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. The stock in today's intraday trade hit a fresh all-time high of ₹1,14,459 apiece, gaining by 2.64%. It then finished the trade at ₹1,13,944.
Starting the year at ₹88,600 apiece, MRF's shares have surged 28.5% 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 15 years, the stock has closed 11 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 5588%, surging from ₹2,003 to its current level of ₹1,13,944 per share.
For the quarter ending September (Q2FY24), the company delivered a robust performance, witnessing a staggering 374% YoY growth in consolidated net profit, soaring to ₹587 crore from ₹123.9 crore in the same period last year.
It witnessed a 6.71% YoY growth in operating revenue to ₹6,217 crore in Q2 FY24. Although revenue growth showed a marginal increase, MRF managed to improve its margins, primarily due to softened raw material costs.
The cost of materials consumed during the second quarter moderated to ₹3,748.9 crore, compared to ₹4,161.18 crore in the corresponding period of the previous fiscal year.
Post Q2 performance, domestic brokerage firm Motilal Oswal adjusted its FY24E and FY25E EPS by +3% and 4% to factor in RM cost benefits, partially offset by weaker revenue growth across categories.
The brokerage said the company's competitive positioning in the sector has weakened over the past few years, which reflects the dilution of pricing power in the PCR and TBR segments. This, coupled with the impact of the planned capex, should limit the expansion in return ratios, it added.
It expects MRF’s return ratios to see a relatively lower uptick compared to peers over the next two years, projecting the company's RoE to reach 12.4% by FY25 (versus Apollo Tyres and CEAT, estimated at 13.5% and 17.2%, respectively).
Given the company's weakening competitive position and similar capital efficiency as peers, the brokerage retained its 'sell' call on the stock with a target price of ₹97,000 apiece.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
- Top Gainers
- Top Losers
- 52 Week High