Annexure-V- Cover Page

for Academic Tasks

Course Code: FINM542 Course Title: Corporate Finance-1

Course Instructor: Dr. Monika kalan Student Name: SANDEEP KUMAR SHARMA

Academic Task Title: MRF Section: Q2250

Academic Task No.: 01

Date of submission: 20 SEPTEMBER 2022 Student’s Roll no: RQ2250A03

Evaluation Parameters: (Parameters on which student is to be evaluated- To be mentioned by

students as specified at the time of assigning the task by the instructor)

Declaration:

I declare that this Assignment is our group work. I have not copied it
from any other student "s work or from any other source except where
due acknowledgement is made explicitly in the text nor has any part
been written for me by any other person.

Student’s signature:

__________________
Group No. Registration Sect Clas Name of Student PEER Reason for Work
for Number ion s Rating Giving PEER done by
Assignment Roll OUT Rating the
No. OF 5 person
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A03 ABOUT analysis
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 ABOUT COMPANY

MRF

The top tyre manufacturer in India is MRF (Madras Rubber Factory). K M Mammen
Mappillai founded it as a little toy balloon unit back in 1946. Much later, in November 1960,
it began producing tyres. The business formed a technological partnership with the American
Tire & Rubber Company.

To access the export market, MRF opened an abroad office in Beirut, Lebanon, in 1964. This
was one of India's initial initiatives to export tyres. The firm established Funskool India in
1989 in partnership with US-based Hasbro International, the largest toy manufacturer in the
world. The agreement was made in the same year with Pirelli for Muscleflex conveyor and
elevator belting as well as with Vapocure of Australia to produce polyurethane paint
formulas.

Currently MRF exports tyres to over 65 countries including America, Europe, Middle East,
Japan, and the Pacific region. It presently has overseas offices in Dubai, Vietnam and
Australia.

Awards

 It was awarded as Most Trusted Tyre Company in India by TNS 2006 global CSR study.
 The company won the J D Power Asia Pacific award for customer satisfaction seven times.
 MRF was honoured with CAPEXIL award as acknowledgement for its export performance.
 2013 Won the JD power award for the 10th time.
 1. Valued at USD 1,259 Million, MRF ranks 48th in a list of Top
75 brands in India.

ANALYSIS:

In collaboration with WPP, Kantar has been releasing a verified rating and
report of the 2018 BrandZTM for the past 4 years. The Top 75 Most Valuable
Indian Brands are rated and included in the research.

Top Indian brands are ranked in accordance with their development and
renown. The research offers advice on how to develop a valuable brand in this
nation and monitors these brands through time. In 2018, the list was expanded
from 50 to 75 to reflect the constantly growing market.

Despite the list's addition of 8 new categories this year, MRF has managed to
cling onto its place by gaining a spot at number 48. Last year, MRF was
valued at USD$1,003 million, as the category grew, so did this tyre
conglomerate's worth and rating. MRF, the lone tyre brand on this list, is now
valued at $1,259 million, topping its appropriate market segment.
and rated 30th among the Top 50 Brands.

CONCLUSION
Company will get more market share in Tyre market of India
Company has low debt
Market value has been increased from USD$1003 million to $1259 million in
2018
And MRF has been rated 30th among the top 50 brands

Reference
MRF Tyres - In The News | Valued at USD 1,259 Million, MRF ranks 48th in a list of Top 75
brands in India.

2. COVID 19 Pandemic – MRF commits Rs.25 crores

ANALYSIS

The Board of MRF Limited has promised to invest Rs. 25 crores to fund different measures
to deal with the COVID pandemic's demands.

The assistance would come in the form of a donation to the PM Cares Fund at the federal
level, assistance to the State governments of the states where the Company has factories, and
direct district-level projects undertaken to provide relief in a variety of ways, such as the
distribution of necessities to migrant workers and the local community and the provision of
medicines and personal protective equipment for medical and relief personnel.
One of the most difficult problems the world has ever encountered is the COVID-19
pandemic. Businesses must work together with governments at this time to help the
communities where we live and work. MRF had launched these activities as a result of
realising this pandemic.

CONCULSION
MRF spends Rs.25 crore to deal with the COVID
They also provide help and support to the society during pandemic
They have donated in PM care fund

3. Neutral MRF; target of Rs 80,000 per share

Analysis
MRF's 1QFY23 revenue was greater than expected, but cost constraints had an impact on the
margin. PAT (profit after tax) was harmed by lower other revenue. The sector is gradually
raising prices to lessen the impact of extreme cost inflation. forecast for EPS in FY23 by
5.5% to reflect margin pressure and raise forecast for EPS in FY24 by 12% to reflect reduced
commodity prices, which will improve margin.

Conclusion

They are raising the price of their share to face inflation

They raise forecast in FY24 by 12% to show reduced prices by which they can improve their
margin

Reference
Neutral MRF; target of Rs 80,000: Motilal Oswal (moneycontrol.com)

4. Share price from Rs 11 to Rs 54,000 in 26 years

Over the years, MRF shares have produced multiple fold returns for investors. When the
stock reached its high on April 30, 2018, if an investor had put Rs 1 lakh in MRF shares 25
years earlier, the corpus would have been worth Rs 74.02 crore.

The MRF's shares had a rapid 2,210% growth between May 11, 2009 and May 9, 2019,
according to BSE statistics. In the previous five years, the stock growth consolidated to
154.83 percent. However, since the start of this year, the company's shares have dropped
18.65% and 28.72%, respectively.

The firm declared a standalone net profit of Rs 1,092.28 crore for the fiscal year 2018–19, a
little increase from that amount. Total revenue increased by 4.80% year over year during
FY19, reaching Rs 16,254.47 crore as opposed to Rs 15,509.55 crore in the prior year.
The tyre maker reported a 14.91% decrease in its standalone net profit during the January-
March quarter, coming in at Rs 293.83 crore as opposed to Rs 345.32 crore during the same
period previous year. However, compared to Q4FY18, when operating revenue was just Rs
3,835.50 crore, Q4FY19 saw an increase to Rs 4,073.45 crore.
In the previous year, MRF declared an equity dividend on its face value of Rs. 10 of Rs. 60
(in total), or Rs. 10 per share. The dividend yield at the present share price of Rs 54,488 is
just 0.11 percent, which is extremely low when compared to the share price.

CONCLUSION

This shows immense growth of MRF from the last 25 years

Also, company had declared dividend which shows stability of the company.
Also, in Q4FY18 there is decrease in the profit but in Q4FY19 saw an increase to Rs 4073 cr
Company will cross Rs 100000 share price after some years

Reference
Rs 11 to Rs 54,000 in 26 years! This stock made patient investors crorepati - BusinessToday

5. MRF vs CEAT vs JK Tyre vs Apollo: Brakes on tyre stocks

Analysis

Due to a decline in raw material costs, the rise in tyre stock prices, which had recently
reached 52-week highs, came to a stop on Friday. Tyre-related equities, in particular MRF,
JK Tyre, CEAT, Apollo Tyres, and Philips Carbon Black (PCBL), had a stellar performance
on the stock exchanges.

The tyre sector is anticipated to do well thanks to relief from the slowdown caused by
COVID, pent-up OEM (original equipment manufacturer) demand, and rising replacement
demand, which is also receiving help from a decrease in the price of its essential raw
materials. With the average raw material basket costing Rs 180/kg since the H1FY21, key
input prices have grown by around 50%, causing a decline in gross margin. Natural rubber's
price has decreased by around 12.5% in the first quarter of FY23. With an increase in topline,
this will boost MRF, JK Tyre, and CEAT's profitability moving ahead, according to Vinit
Bolinjkar, Head of Research at Ventura Securities.
The price of MRF shares, which continued to decline today, reached a 52-week high of Rs
93,855 in the previous session before declining at the close of trading. The stock lost 7.42%
further today, trading at Rs 85,869 in late transactions.

Similar to JK Tyre, CEAT cracked 2.85 percent, Apollo Tyres plunged 5.52 percent, and
PBCL dropped 1.31 percent down. Other tyre stocks also declined.

CEAT – target price – Rs 1,777 (17.5X FY24 EPS); JK Tyre – target price – Rs 203 (10.8X
FY24 EPS); and MRF – target price – Rs 96,746 (27.8X FY24 EPS),

Conclusion

MRF is targeting for Rs 96000 which is 24% more before the ending of FY24
Ceat is targeting 17% more share price before the FY24 ending
Jk tyre is targeting 10% before FY24
There is a decline in the price of raw materials so there will be high margin in their products
MRF is at dominant position

6. War, raw material cost pull down MRF Q4 net by 51% to

₹157 crore

Analysis

To 5,200 crore, operating revenue increased by 9.8%.

Due to difficulties brought on by the Ukrainian conflict, skyrocketing raw material prices,
and COVID-19 concerns, the leading tyre producer MRF Ltd.'s standalone net profit for the
fourth quarter ended March decreased by 51% to 157 crore.

Revenue from operations increased by 9.8% throughout the review period to Rs 5,200 crore,
including a subsidy of 87 crore from state governments. Tax expenditure decreased from 94
crore to 56 crore. During the entire year, exports increased by 33.45% to Rs1,779 crore,
according to a statement.

Despite its best efforts, the firm has been unable to fully recover from the enormous rise in
raw material costs. Following the epidemic, market conditions were also unfavourable for
tolerating such frequent price rises, according to MRF.

In addition to the uncertainty caused by the COVID 19 pandemic in the early part of the year,
problems with the availability of raw materials, and difficulties brought on by the Ukrainian
war, the management of MRF stated that it would try its best to recover the cost increases in
the upcoming months.

The board proposed a final dividend of Rs 144 per share on Wednesday. Two interim
dividends of 3 Rs each were previously paid, bringing the total to 150 Rs per share.

Conclusion

Company’s profit of fourth quarter has been decreased by 51% due to war between ukrane
and Russia because there is a price increase of raw material

company this year grew by 9%

And MRF can increase their product prices in future for recovering the loss
Tax expenditure decreased from 96 crore to56 crore
During this year MRF exports has been increased by 33% (1779crore)

Reference
War, raw material cost pull down MRF Q4 net by 51% to ₹157 crore - The Hindu

7. MRF reports 71 per cent fall in Q3 net at ₹146 crore

Analysis

For the second consecutive quarter, top tyre manufacturer MRF recorded a
considerable decline in net profit as compared to the prior year.

Despite an increase in income, the firm recorded a whopping 71% decrease in

standalone net profit for the quarter ending December 31, 2021, falling to
Rs 146 crore from Rs 512 crore in the same period the previous year.

According to a statement, operating revenue increased 6% to 4,830 crore in

the December 2021 quarter from Rs4,567 crore the year prior.
The total cost was 4,702 crores (Rs3,950 crore). Before special items and
taxes, MRF's profit was less at 197 crore (Rs680 crore).

Subdued recovery in the replacement market impacted tyre companies

bottomline
 Conclusion

in december 2021 quarter ending profit falls from 512 crore to 146 crore about
71% fall in the profit
operating revenue increased 6% to 4830 crore in december

reference
MRF reports 71 per cent fall in its Q3 net at ₹146 crore - The Hindu
BusinessLine

8. MRF Q4 profit falls 50.26% to Rs 165.21 crore

Analysis

The company had posted a consolidated profit from continuing operations at

Rs 332.15 crore in the same period of the previous fiscal, MRF Ltd said in a
regulatory filing.

Due to rising costs, particularly for raw materials, tyre industry giant MRF Ltd
announced on Tuesday a 50.26% fall in its consolidated earnings from
continuing operations to Rs 165.21 crore for the fourth quarter ended March
2022.

The business had generated a consolidated profit from continuing operations

of Rs 332.15 crore in the same period of the previous fiscal, MRF Ltd said in a
regulatory filing.

Compared to Rs 4,816.46 crore a year ago, the fourth quarter's consolidated

revenue from operations was Rs 5,304.82 crore.

MRF Ltd said that the total amount spent during the reviewed period was
higher at Rs 5,142.79 crore compared to Rs 4,425.21 crore in the same quarter
last year, and that the cost of materials consumed also increased, rising to Rs
3,293.14 crore from Rs 2915 crore.

Conclusion
 In march 2022 ending quarter company’s profit falls to 165 crore about 50%
fall in the profit because of raw material prices
After comparing last year fourth quarter revenue from operations was approx.
300 crore more than last year which is showing that sale of MRF is increasing

Reference
MRF Q4 profit falls 50.26% to Rs 165.21 crore (moneycontrol.com)

9. MRF Q1 consolidated profit from continuing operations falls

to Rs 124 crore
Analysis

tyre maker MRF Ltd

consolidated profit from continuing operations fell 25.35% to Rs 123.6 crores in the first
quarter ended June impacted by higher raw material costs reported that it was The company
said that in the same period last year he reported a consolidated profit from continuing
operations of Rs 165.58 crore, but the board said he had approved the raising of Rs 100 crore
through the issuance of non-convertible bonds on a private placement basis. .

MRF Ltd said its consolidated operating revenue for the June quarter was Rs 569.593 crores
compared with Rs 418.396 crores for the previous financial year.
Total expenditure for the quarter amounted to Rs 556.663 crores compared to Rs 405.424
crores last year. The cost of materials consumed in the quarter was higher at Rs 4,114.06
crore

Conclusion: -
MRF Ltd.’s profit has decreased from previous year because of high raw material cost, it
directly impact on the sales of the MRF because Rising raw material costs force companies to
raise prices, which ultimately reduces company profits in the future. This news also made
effect on the share price of MRF.

References
https://economictimes.indiatimes.com/markets/stocks/earnings/mrf-q1-
consolidated-profit-from-continuing-operations-falls-to-rs-124-crore/
articleshow/93451756.cms

10.MRF plans Rs 980-cr expansion in Telangana

Analysis

Tyre giant MRF Ltd announced plans to expand its manufacturing facility at Sadasivpet in
Telangana's Medak district.

MRF Chairman and CEO KM Mammen visited Prime Minister K Chandrasekhar Rao of
Telangana and outlined the expansion plan with new facilities and capital investment of
around Rs 980 crore.

MRF Manufacturing Base in Medak District it has been in operation since 1990 and so far
around Rs 4300 crore has been invested in units here.

The MRF team noted the improved power supply situation in the state, especially in the
industrial sector, which it said was a good sign for industrial growth.

Conclusion: -
The company has invested 980 crores to expand and improve its production units.
This will ultimately increase the company's sales and profits in the future, as increased
production will lead to increased sales.
Reference: -
https://economictimes.indiatimes.com/markets/stocks/earnings/mrf-q1-consolidated-profit-
from-continuing-operations-falls-to-rs-124-crore/articleshow/93451756.cms

11.CCI imposes Rs 1650 cr penalty on Apollo Tyre, Ceat, MRF,

JK Tyre and Birla Tyre for anti-competitive practices
In a recent development, the Competition Commission of India (CCI) fined five tire
manufacturers around Rs 16.5 crore.

CCI fined Apollo Tires he Rs 425 crore. MRF said he received a penalty of Rs 390 crore.
CEAT and JK Tyres were fined Rs 252 crore and Rs 390 crore for him respectively. Birla
Tire has been fined Rs 178 crore.

CCI He has been investigating the case since 2018, but the tire company and its association
have appealed to the Chennai High Court. But last month, the Chennai High Court allowed
CCI to make an order when it filed its report in a sealed envelope.

By issuing this order, CCI fined these tire companies in the country.

The tire manufacturer's only option is to challenge the Supreme Court's order. However, the
CCI has been investigating this for quite some time, and we have previously seen that the
order was only issued with the approval of the Madras High Court. In this case, the situation
does not look good for tire manufacturers either.
The lawsuit against
Tire Company was launched by the Ministry of Enterprises after finding that five domestic
tire manufacturers accounted for his 90% market share.

Conclusion: -

This news directly affect the company's goodwill and name and automatically lead to a
decline in company sales. Rs 390 crores is also a lot of money, which is a loss for the
company and reduces revenue by 390 crores.

Reference: -
https://www.zeebiz.com/companies/news-cci-imposes-rs-1650-cr-penalty-on-
apollo-tyre-ceat-mrf-jk-tyre-and-birla-tyre-for-anti-competitive-practices-
177950

12.Share price of MRF falls as Nifty strengthens

Share price fell 1.13% to Rs 84443.25 in Friday.
shares hit a high of Rs 85905.0 and a low of Rs 84300.0 during the session.
Return on equity (ROE) of stock was 4.76
MRF Ltd Shares Hit 52 Week High And 52 Week Low At Rs 89333.0 And Rs 62944

Conclusion: -

Reference: -
https://economictimes.indiatimes.com/markets/stocks/stock-watch/share-price-of-mrf-falls-
as-nifty-strengthens/articleshow/94094129.cms