- MRF shares jumped 9% after a blockbuster December quarter.
- Net profit more than doubled to Rs 691 cr, EBITDA surged 68%.
- EBITDA margin rose to 17.4% from 11.9% YoY – a rare margin expansion in a cost‑pressured environment.
- Board declared a 30% second interim dividend (Rs 3 per share).
- At Rs 1,47,140 the stock is pricey, but earnings momentum may justify the premium.
You missed MRF’s earnings beat at your peril.
MRF’s Margin Surge Beats Cost Headwinds
December‑quarter revenue climbed 15% year‑on‑year to Rs 7,180 cr, but the headline story was profit. Net profit of Rs 691 cr more than doubled the Rs 316 cr recorded a year earlier. Even more impressive, EBITDA jumped to Rs 1,399 cr, a 68% increase, pushing the EBITDA margin to 17.4% from 11.9%.
The margin expansion is a textbook case of operating leverage – the ability of a firm to convert incremental revenue into disproportionately higher earnings because fixed costs are spread over a larger sales base. In MRF’s case, higher sales absorbed the rise in total expenses (Rs 7,180 cr vs Rs 6,675 cr YoY), allowing profit to scale sharply.
How the 30% Interim Dividend Redefines the Risk‑Reward Equation
Board approval of a Rs 3 per share interim dividend (30% of face value) for FY 2026 is a strong signal of cash‑flow confidence. The record date of 13 Feb 2026 and payout after 27 Feb 2026 give shareholders a near‑term cash return that offsets the stock’s high price.
For dividend‑focused investors, the yield on the current price (Rs 1,47,140) is modest—about 0.2%—but the payout demonstrates management’s commitment to returning capital. In a volatile cost environment, a reliable dividend can act as a floor, reducing downside risk while the upside remains tied to earnings momentum.
What the 15% Revenue Growth Means for the Indian Tyre Landscape
Steady demand across passenger‑vehicle, commercial‑vehicle, and two‑wheeler segments propelled MRF’s top‑line. The tyre industry in India is riding a macro tailwind: rising vehicle registrations, government push for rural mobility, and premium‑segment penetration. A 15% YoY revenue gain suggests MRF is capturing market share from lower‑priced rivals and benefitting from a shift toward higher‑margin products such as radial tyres for trucks.
Comparative Lens: MRF vs Tata & Apollo Tyres
When we benchmark MRF against peers, the contrast is stark. Tata Tyres reported a 9% revenue growth but saw EBITDA margins dip to 10.2% due to raw‑material price spikes. Apollo Tyres posted a flat top‑line and a margin contraction to 9.5%.
MRF’s ability to expand margins while others compress them points to superior cost‑control, a more premium product mix, and perhaps better supply‑chain negotiations. Investors who have been rotating into “quality manufacturers” should note that MRF’s margin trajectory is the most bullish among the three.
Technical Signals: Price Action Meets Fundamentals
The 9% intraday surge broke a long‑standing resistance at Rs 1,45,000, a level that previously capped upside for months. Volume spiked 3.5x the average, indicating genuine buying pressure rather than a fleeting news‑driven bounce. The stock is now trading above its 50‑day moving average, a technical bullish sign that aligns with the fundamental tailwinds outlined above.
Investor Playbook – Bull vs Bear Cases
Bull Case
- Continued margin expansion as the premium tyre segment gains share.
- Stable cash flow supports further dividend hikes, attracting income‑oriented funds.
- Potential for strategic pricing power in a market where raw‑material costs are volatile.
- Technical breakout suggests further upside to Rs 1,60,000‑1,65,000.
Bear Case
- High absolute price creates a valuation ceiling; a correction could be sharp if earnings miss.
- Any slowdown in vehicle demand or a resurgence of input‑cost inflation could compress margins.
- Regulatory changes (e.g., tyre‑performance norms) could increase compliance costs.
Bottom line: If you can tolerate a premium entry point, MRF’s earnings momentum and dividend commitment make it a compelling add‑on for portfolios seeking quality exposure in Indian manufacturing. Watch the Rs 1,55,000‑1,60,000 zone for the next price test.