Views on MRF 4QFY2016 Results: Angel Broking

Views of Mr. Milan Desai (Research Analyst - Mid Caps, Angel Broking) on MRF 4QFY2016 Results:

4QFY2016 Numbers above expectations

"For 4QFY2016*, MRF reported numbers that beat our estimates on EBITDA and bottom line front. The top-line for the quarter remained flat at INR 3,330cr (marginal decline of 0.2% on YoY basis), which is 2.8% lower than our estimate of INR 3,425cr. The Indian Tyre sector continues to face the heat from the cheaper Chinese imports that have flooded the Indian market in the TBR segment which can be partially responsible for the flat top-line number. Softer raw material prices which came down in the latter two months of the past quarter aided in EBITDA margin expansion of 530bp YoY to 23.4%. We had estimated EBITDA margin of 18.7% with major deviation caused by raw material cost as a percentage of sales. The other income grew by 209.3% YoY to INR 77cr and as a result, the net profit jumped by 45.4% YoY to INR 461cr.

The company has posted EBITDA margins that have beaten our estimates over the past two quarters. We expect the top-line to improve over the next six months owing to replacement cycle for MHCVs coming up. We will assign a rating post revisiting our numbers."

Shares of MRF LTD. was last trading in BSE at Rs.41244.45 as compared to the previous close of Rs. 41605.9. The total number of shares traded during the day was 841 in over 540 trades.

The stock hit an intraday high of Rs. 41990 and intraday low of 41111.05. The net turnover during the day was Rs. 34894882.

Source : Equity Bulls

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