MRF Tyre News : MRF Tyre Share Prices Increases

India’s largest manufacturer of tyres, MRF created history on Wednesday when it surpassed the INR 50,000 per share mark. With this, MRF went on to become the only third company in country’s stock market to achieve this momentous feat, which was facilitated by an all-round improvement in the tyre stocks. This year, till now, the Chennai-based tyre maker’s shares are up by 17.08 percent, while the ones with top gains have been Apollo Tyres with 39.5 percent and Balkrishna Industries with 33.6 percent. Although the company has secured a sky-high share price, however, it is still quoting at a price-to-earnings that is only 10 times its projected FY17 earnings, which makes it the cheapest quality stocks in the market.

The founder of Equinomics Research and Advisory, Mr. G Chokkalingam stated that going as per the stats anything which goes up by fifty percent in a short span of time, it is alarming. However, the case is different with branded market leader MRF as it is still trading at nearby 12 PE. As it is not costly, in a couple of years one can expect it to reach up to INR 65,000, he further added.

On Wednesday, the numbers at the time of stock closing read INR 49,989, which is an up by 7.29 percent after crossing INR 50,000. Indian multi-national tyre brand has got greater financials with regards to consistent earnings growth, margins and return on equity. Compared to various FMCG firms MRF’s financial credentials are superior and this is accounting for a perception shift among the tyre company investors.

According to a research analyst from a leading financial services firm, sighting the decent up from existing prices, the estimated profits for 2017 fiscal are anticipated at 22-23 percent. Declining natural rubber costs will make way for evident good margins alongside implementation of anti-dumping duty is also seen as a trigger for the tyre industry as a whole. Being almost a zero-debt tyre company with extensive expansion plans, it is advised to the investors to hold their shares for better returns, the expert stated.

Due to the better monsoon, the revival in the rural demand will definitely see an increase resulting in the acceleration for tyre and automobile companies in the country. Among tyre firms MRF, the premium tyre company possesses the best chances to benefit from this surge. Moreover, the 2016 JD Power, Indian Original Equipment Tyre Customer Satisfaction Index (TCSI) Study reveals that homegrown MRF and Japan-based Bridgestone tyre company have the highest rate of overall consumer satisfaction.