MRF Limited, one of the country’s leading tyre manufacturers, has faced a major setback in the second quarter of the current financial year (2026-27). The company’s net profit has declined by 28% to Rs 369 crore, compared to the same period in the previous financial year. During the corresponding period last year, the company had recorded a profit of Rs 512 crore. The primary reason for this drop in profit is the rising cost of raw materials. By the time the market closed on Monday, the price of one MRF share stood at Rs 1,24,875.
However, despite the decline in profit, the company has recorded a significant increase in its total income, or revenue. In the September quarter, MRF’s total revenue from operations grew by approximately 18% to reach ₹8,524 crore, compared to ₹7,250 crore in the same period last year. This clearly indicates that the demand for the company’s tires in the market remains robust; however, rising production costs have put pressure on profits.
Rising Raw Material Costs Raise Concerns
According to a Reuters report, the company’s total expenses increased by over 22% between July and September. A primary factor behind this is a nearly 44% surge in raw material costs. The company’s costs have risen due to supply disruptions caused by the ongoing conflict in West Asia, as well as high rubber prices resulting from adverse weather conditions in major natural rubber-producing countries.
This has impacted not only MRF but also other major tire companies like JK Tyre and CEAT, all of which have seen a decline in their profits. However, the industry has found support through sustained demand for tires from vehicle manufacturers.
Despite the drop in profits, MRF has announced a dividend for its shareholders. The company has declared a dividend of ₹3 per share (representing a 30% dividend on a face value of ₹10) for the financial year 2026-27. November 17, 2026, has been set as the record date for this, and it will be distributed to eligible shareholders on or after December 1, 2026. Meanwhile, in the latest trading session on the NSE, MRF shares fell by 1.26% to close at Rs 1,25,105.
(Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Prameya.com advises its readers to consult with their financial advisors before making any decisions involving money.)
