How has been the historical performance of MRF?

Revenue and Operating Performance

MRF’s net sales have shown consistent growth, rising from approximately ₹16,062 crores in March 2019 to ₹28,153 crores by March 2025. This represents a compound growth trend driven by expanding market demand and operational scale. Total operating income mirrors this trend, with no other operating income reported, indicating core business activities as the primary revenue source.

Raw material costs have increased in line with sales, reaching nearly ₹18,488 crores in the latest fiscal year, reflecting the company’s exposure to commodity price fluctuations. Employee costs have also risen steadily, reaching ₹1,885 crores, indicative of workforce expansion and inflationary pressures. Other expenses have climbed to over ₹4,257 crores, consistent with the company’s growing operational footprint.

Operating profit before other income (PBDIT) excluding other income peaked at ₹4,253 crores in March 2024 but slightly declined to ₹4,084 crores in March 2025. Including other income, operating profit remained strong at ₹4,493 crores in the latest year, underscoring stable earnings generation capacity.

Profitability and Margins

Profit before tax (PBT) has experienced fluctuations, rising from ₹1,652 crores in March 2019 to a peak of ₹2,787 crores in March 2024 before easing to ₹2,479 crores in March 2025. Correspondingly, profit after tax (PAT) followed a similar pattern, with ₹1,130 crores in 2019, peaking at ₹2,081 crores in 2024, and settling at ₹1,869 crores in 2025.

Operating profit margins excluding other income have varied between 10.38% and 18.2% over the period, with the highest margin recorded in March 2021. The PAT margin has ranged from a low of 3.34% in March 2023 to a high of 8.76% in March 2020, reflecting the impact of cost pressures and market conditions on net profitability.

Earnings per share (EPS) have mirrored profit trends, with a notable increase from 2,666 in March 2019 to a peak of 4,908 in March 2024, before a slight decline to 4,409 in March 2025. This indicates sustained shareholder value creation despite some volatility.

Balance Sheet and Financial Position

MRF’s balance sheet has strengthened significantly, with shareholder’s funds increasing from ₹12,215 crores in March 2020 to ₹18,488 crores in March 2025. Total reserves have similarly grown, supporting the company’s capital base. The book value per share has appreciated from ₹28,808 in 2020 to ₹43,605 in 2025, underscoring enhanced net asset value per share.

Total liabilities have risen in line with business expansion, reaching ₹29,567 crores in March 2025. Long-term borrowings have decreased from ₹823 crores in 2023 to ₹374 crores in 2025, reflecting a reduction in debt levels. However, short-term borrowings have increased to ₹2,530 crores, indicating a shift in working capital financing.

On the asset side, net block (fixed assets net of depreciation) has grown from ₹8,870 crores in 2020 to ₹12,370 crores in 2025, signalling ongoing capital investment. Current assets have also expanded, with total current assets reaching ₹13,396 crores in 2025, supported by increased inventories and current investments.

Cash Flow and Liquidity

Cash flow from operating activities has shown resilience, with ₹1,867 crores generated in March 2025, though this is lower than the ₹4,324 crores recorded in March 2021. Cash flow after changes in working capital remains positive at ₹2,460 crores in 2025, despite a significant working capital outflow of ₹1,710 crores in the same year.

Investing activities have consistently resulted in cash outflows, reflecting ongoing capital expenditure and investments, with ₹2,082 crores spent in 2025. Financing activities have fluctuated, with a modest inflow of ₹282 crores in 2025 after several years of outflows.

Overall, net cash inflow remains positive but modest at ₹67 crores in 2025, with closing cash and cash equivalents increasing to ₹370 crores, indicating adequate liquidity to support operations and growth initiatives.

Outlook and Summary

MRF’s historical performance reveals a company that has steadily expanded its revenue base and asset footprint while managing profitability amid varying market conditions. The company’s strong balance sheet and positive cash flows provide a solid foundation for future growth, although margin pressures and working capital management remain areas to monitor closely. Investors should consider these factors alongside sector dynamics when evaluating MRF’s long-term prospects.

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