Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Union Budget
Budget 2011-2012 Home
Industry Expectations - Budget 2011-2012
Industry Reactions - Budget 2011-2012
Budget 2010-2011
Budget 2010-2011 Home
Industry Expectations - Budget 2010-2011
Industry Reactions - Budget 2010-2011
Contributor's Corner
Bonanza Portfolio
Hemant K Gupta
Krish Bhatt
S A A R T H I
Trinity Investments
Exchange Information
BSE 2009 Holidays
NSE 2009 Holidays
Investor Guide
Depository & Dematerialisation
Grievance Redressal
Investor Guide
SEBI
Trading of Securities
Transfer of Securities
Your Rights
Budget 2009-2010
Budget 2009-2010 Home
Industry Expectations - Budget 2009-2010
Industry Reactions - Budget 2009-2010
Interim Budget 2009-2010 Home
Industry Expectations - Interim Budget 2009
Budget 2008-2009
Railway Budget 2008-2009
Industry Expectations - Budget 2008
Union Budget 2008-2009
Highlights of Budget 2008-2009
Summary of Budget 2008-2009
Industry Reactions - Budget 2008
IPOs
Current IPOs
Past IPOs
IPO Subscription
Mutual Funds
Gold Exchange Traded Fund
MF Unique Holding
Forthcoming Dividends
ELSS Schemes Comparison
Tax Plans
New Fund Offers
Research
Arbitrages
Equity
Market Whispers
Tax Planning
Home
Equity Linked Savings Scheme
Post Office MIS
9% GOI Senior Citizens Savings Scheme
8% Savings (Taxable) Bonds
Kisan Vikas Patra
National Savings Certificate
Public Provident Fund
Research

| More

BUY MRF - Outstripping yet again: Anand Rathi Institutional Research

Posted On: 2016-08-16 20:44:28

MRF - Outstripping yet again; retaining our Buy with a target price of Rs 43500.

MRF's Q1 FY17 revenue was flattish yoy because of competition (Chinese tyres) and lower realisations. Yet, its greater operating efficiency resulted in its highest-ever margin of 24.1%. We expect some shrinking in margins due to higher rubber prices. But, we believe the industry might very comfortably pass on the impact of rising rubber prices in coming quarters and protect its margins.

Q1 FY17 result analysis. At Rs. 34.8bn, revenue was flat yoy. This, we believe, was due to greater volumes and lower realisations. Lower rubber prices (than a year ago) aided the 140-bp gross-margin expansion. However, as staff and other expenses increased, EBITDA margin expanded only 40bps to 24.1% (the highest since FY09). PAT came at Rs. 4.9bn, up only 2% yoy.

Advantage market leader. Dominant in all segments as well as a leader in the replacement market, MRF is the only company commanding a premium in all categories. Despite stiff competition from Chinese imports, we expect it to race ahead of the industry due to its higher OE growth and its leading position in the replacement market. We expect 9% volume growth during FY16-18.

Higher rubber price vs. greater operating efficiency. With its greater efficiency, we expect MRF to protect its margins despite pressure on input costs, especially of rubber. Demand (especially rural) because of the good monsoon would enable higher bias capacity utilisation, which in turn would provide a cushion to margins in the context of rising rubber prices. Also, we believe that it would be able to pass on any increase in rubber prices owing to its leading position.

Valuation. We retain our estimates, and maintain a Buy. We value it at 10x FY18e and arrive at a price target of Rs. 43,500, implying 19% potential. Risks. Rising rubber prices.

Shares of MRF LTD. was last trading in BSE at Rs.36105 as compared to the previous close of Rs. 36116.45. The total number of shares traded during the day was 524 in over 385 trades.

The stock hit an intraday high of Rs. 36483.35 and intraday low of 35969.4. The net turnover during the day was Rs. 18976595.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Views on LIC Housing Finance Limited 4QFY2017 Results: Angel Broking
Wipro - Q4FY17 Result Review - Kotak Securities Limited
Views on Wipro Limited 4QFY2017 Results: Angel Broking
Axis Bank - Q4FY17 - Worst for the bank could get over in near term, better days ahead: Angel Broking
Ultratech Cement - Q4FY17 Result Review - Kotak Securities Limited
HDFC Bank back on growth trajectory: Angel Broking
Sun Pharmaceutical US Update: Angel Broking
Global ambiguity sizzles; Base metals' rally fizzles: Angel Broking
Asset quality a negative surprise form Yes Bank: Angel Broking
Heavy weight banks look a good bet: Angel Broking
Banks: Tightening the screws - Kotak
Utilities: The supply glut - Kotak
Insurance: Ending a strong year on a stronger note - Kotak
TCS - Q4FY17 result review - Kotak
Views on Tata Consultancy Services Limited 4QFY2017 Results: Angel Broking
Strategy: Small need not be beautiful - Kotak
Indiabulls Real Estate restructures to create value: Angel Broking
Infosys Q4 2017 results - Dipen Shah, Sr. Vice President - PCG Research, Kotak Securities Limited
Views on Infosys Ltd 4QFY2017 Results: Angel Broking
Infosys - 4QFY2017 Result Preview: Angel Broking
Metals & Mining (Attractive): 4QFY17 preview-when it shines the most - Kotak
Energy: Weaker end to a subdued year - Kotak
Apex court disallows rise in imported coal tariff, though awards compensation for lack of domestic coal
Utilities: Supreme Court-denies compensation, but with a rider - Kotak
Strategy: The curious case of the Indian market - Kotak Institutional Equities
Economy: INR: Appreciate, for now, but be cautious - Kotak Institutional Equities
Energy: OMCs Refining - marketing - Kotak Institutional Equities
Cement: Earnings weakness persists - Kotak Institutional Equities
Fall in IT conglomerates evened out by Banking counters: Angel Broking
Shankara Building Products lists at a healthy premium to issue price: Angel Broking
USFDA action on Indoco Plants: Angel Broking
Karur Vysya Bank - Easing troubles to pave way for growth: Angel Broking
Navin Fluorine International - The unique chemistry of growth: Angel Broking
Dr Reddy's inks distribution pact with Integra Life Sciences: Angel Broking
BS-IV rollout expected be neutral on the automobile sector: Angel Broking
Shankara Building Products Ltd - IPO Note - Sushil Finance
'R' for RERA - for Realty coming to Reality soon: Angel Broking
Reliance Capital - Refurbishing core; monetisation crucial; company update; Buy - Edelweiss
D-Mart delights its investors: Angel Broking
Shankara Building Products Limited - Thrust on retail to boost potential: Angel Broking
Impact of Rupee Strength on IT and Pharma: Angel Broking
Idea Surges 12% on the back of positive news flows: Angel Broking
Sun Pharmaceutical - USFDA to Lift Import Alert Regulator to permit supply of products from Mohali: Angel Broking
IT Update - Ban on premium processing of H1-B visas: Angel Broking
Tech Mahindra - Acquires CJS Solutions in US: Angel Broking
Dr. Reddy's Laboratories - Gets USFDA observation for Duvvada oncology formulation Facility: Angel Broking
VIP Industries - Travelling smart on the luggage track: Angel Broking
Avenue Supermarts - IPO Note - Numero Uno! - Reliance Securities
IT Update: Ban on premium processing of H1-B visas: Angel Broking
DATA WARS BEGIN... AND THE WINNER IS: THE DATA CONSUMER: Angel Broking


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2017