MRF net profit falls in July-September quarter on higher material costs
The Chennai-based tyre maker reported a decline in profit despite seeing double-digit growth in revenue from operations.
Chennai-based tyre maker MRF Ltd reported a decline in net profit for the July-September quarter on Tuesday, according to reports by The Economic Times and Moneycontrol. The company's net profit fell to Rs 417.19 crore, compared to Rs 540.13 crore in the same period last year.
Revenue from operations grew by 17.4 per cent to reach Rs 8,660.19 crore, up from Rs 7,378.72 crore in the previous year. However, total expenses rose by 21.8 per cent to Rs 8,269.77 crore during the quarter.
The increase in expenses was largely driven by a 43.2 per cent rise in material costs, which reached Rs 6,552.57 crore. MRF stated that the rise in raw material prices amid global uncertainties impacted profitability, though price increases and cost-saving measures helped mitigate the pressure.
The company noted that it anticipates ongoing volatility in commodity markets and expects raw material and logistics costs to stay high. It said it would take measured steps to manage these challenges.
The board has declared an interim dividend of Rs 3 per share. The company has set November 17 as the record date, with the payment scheduled to take place on or after December 1.