On Tuesday, June 13, MRF became the first Indian stock to reach the rupee one lakh per share barrier. The stock achieved an all-time high of Rs.8261562.89 during morning session on the BSE, opening at 99,500 against the previous close of 98,939.70.
In the past year, the stock has seen significant advances. In comparison to the benchmark Sensex, which saw a gain of 19%, it has increased by 45% in the past year. On June 17, 2022, MRF stock reached a 52-week low of 65,900.05 on the BSE. The stock has increased 50% since that point as of the previous session’s close.The company’s good March quarter results and increased profitability expectations as a result of the decline in raw material prices may be responsible for the recent increase in the stock price.
For the fourth quarter that ended in March 2023, the company’s consolidated profit after tax (PAT) was Rs. 25825.00 crore, an increase of 86 percent year over year (YoY) over the net profit of 168.53 crore realised in the same quarter of FY22. Its consolidated operating revenue for the fourth quarter of FY23 was Rs. 481172.20 crore, an increase of 10.12% YoY from the fourth quarter of FY22’s Rs.436948.54 crore.
Its net expenses in the fourth quarter of FY23 were Rs. 445635.13 compared to Rs. 36706307.62 in the fourth quarter of FY22. In the quarter under review, MRF’s EPS increased to 803.26 from the Rs 389.55 recorded in the same quarter last year.
Analysts noted that MRF’s income stream is diversified throughout the categories and its balance sheet is robust, making it less susceptible to a slowdown in a specific segment. So, someone with ample funds may think about purchasing the stock in the long run. The stock currently appears to have some momentum left for the near future.
All About MRF Share Price (Madras Rubber Factory)
The current value of the anticipated stream of future dividend payments is represented by the company’s share price. Only this dividend stream influences the share price in an efficient market.
It’s interesting that MRF’s share price is so high in India. The company’s strong brand reputation is the primary explanation behind this. It is regarded as one of India’s top tyre manufacturers.Over the years, MRF has constantly kept up its performance.
It has increased its market share and implemented a number of strategies to grow its company internationally. Additionally, the business has been successful in lowering expenses and raising productivity, both of which have boosted sales.
MRF Share is incredibly expensive in India, and the company has a net worth of Rs. 13178.86 cr. This is due to the fact that the business is a domestic one that sells goods in India. It requires a large sum of money in order to supply goods to the Indian market. To spread the word about its products, the business invests a lot of money in advertising.
Because consumers continue to be interested in purchasing MRF’s goods, the price of its shares is still high. The price of MRF shares also stays high due to the continued high demand for these goods.
Who is the CEO of MRF?
| Founder | K. M. Mammen Mappillai |
| Headquarters | Chennai, Tamil Nadu , India |
| Area served | Worldwide |
| Key people | K.M.Mammen (Chairman), Rahul Mammen Mappillai (MD) |
Why is the Market Price of MRF so high in India?
Reason 1:
- The fact that MRF is a well-known firm in India and has a strong reputation there may be the first factor contributing to the high pricing. People may believe that because the company has been around for more than 50 years and has a solid reputation there, it will never go out of business. People are aware that this business will offer better products than any other and that its customer service will likewise be superior.
- People in India trust MRF since it is a well-known brand and they are aware of the high calibre of its products, therefore they do not need to worry about the product’s calibre before purchasing it.
- MRF is a prime illustration of how many small-scale industries may grow into thriving ones through dedication, perseverance, integrity, and innovation.
Reason 2:
- The second reason for such a high price is that when the government changes policy, there is a possibility that all stocks could be impacted because there is a possibility that the government may take actions that negatively impact the stock market, which could result in a sizable loss in share market capital and cost.
- The capacity of the organisation to produce earnings and cash flow, as well as its strategies for using this cash flow to raise shareholder value, provide the answer. The business operates with one of India’s most effective business models and consistently achieves high free cash flow (FCF) margins. The corporation also has a sizable net cash position. By generating value for shareholders through significant dividend payments or share buybacks, it can quickly raise shareholder value.
Financial Fundamentals of MRF share price
MRF routinely generates strong returns on capital employed (ROCE) thanks to its low-cost operating style. Its ROCE has been above 30% for a number of years and is anticipated to stay there for the foreseeable future. This enables it to produce high FCF margins. The FCF margin for MRF has routinely exceeded 20%.
The discounted value of the dividends that stockholders can anticipate receiving drives the stock price. Future dividend payments will increase as the company grows. Additionally, a company’s market share will increase with size. Both of these variables raise the cost.
Compared to other Indian companies, MRF’s operations are so large that it is simpler to increase revenues by simply opening more outlets. The highest price-earnings ratio among stocks listed on Indian stock markets is MRF’s.
The cause is attributed to the company’s sustained high growth rate and stable net solid profit margins and return on equity ratios. This indicates that investors have been prepared to pay more to buy into this growth narrative.
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