MRF Q2 Results: Profit Falls 26.6% to ₹386.99 Crore on Raw Material Costs

MRF Ltd’s consolidated net profit fell 26.6% to ₹386.99 crore in the July–September quarter, the tyre maker said on November 10, as sharply higher raw material costs outweighed double-digit sales growth. Alongside the MRF Q2 results, the board declared an interim dividend of ₹3 per share.

That compares with a consolidated profit of ₹527.43 crore in the same quarter last year, as shown in the latest filing. Consolidated total income rose 17.4% to ₹8,791.58 crore from ₹7,489 crore, while revenue from operations also grew 17.4% to ₹8,660.19 crore from ₹7,378.72 crore.

MRF Q2 results: costs outrun sales growth

Consolidated profit before tax fell 25.5% to ₹521.81 crore from ₹700.45 crore a year earlier, according to the results filed with the stock exchanges. The company set aside ₹134.82 crore towards tax during the quarter.

MRF blamed the weaker bottom line on a steep increase in raw material prices amid global uncertainties. Consolidated cost of materials consumed rose about 43% to ₹6,552.57 crore from ₹4,577.49 crore. Price increases and cost-saving measures absorbed part of the hit, the company said, but they were not enough to stop profit from falling.

On a standalone basis, MRF net profit declined 27.8% to ₹369.15 crore from ₹511.59 crore, while standalone revenue from operations rose 17.6% to ₹8,523.96 crore. The company makes tyres, tubes, flaps and tread rubber, and also trades in rubber and rubber chemicals.

The trend has reversed from a year ago. In the September 2025 quarter, MRF had credited softening raw material prices for its profit growth; this time, the same cost line has moved sharply the other way.

Demand, however, held firm. MRF reported double-digit sales growth in the quarter, backed by orders from vehicle manufacturers and steady buying in the replacement market.

Interim dividend and cash flow

The MRF interim dividend of ₹3 per equity share works out to 30% of the ₹10 face value and relates to the financial year ending March 31, 2027. The company has fixed November 17, 2026, as the record date, and the payout will be made on or after December 1, 2026.

Cash generation was noticeably weaker in the first half. Consolidated net cash from operating activities came in at ₹634.16 crore for April–September, compared with ₹1,869.48 crore in the same period a year earlier.

MRF shares swung between losses and gains on Wednesday, the first trading session after the results, as markets were shut on November 10 for Diwali-Balipratipada. The stock opened lower but rose as much as 1.09% to ₹1,26,475 on the National Stock Exchange in intraday trade. CLSA kept its “outperform” rating, though it expects costs to stay elevated in the December quarter.

What it means for the tyre sector

As a major supplier to both carmakers and the aftermarket, MRF offers a useful read on input-cost pressure across the auto component chain. The September quarter shows a clear gap opening up between volume growth and profitability.

Vehicle demand has stayed healthy, as reflected in the record October sales reported by Maruti Suzuki and in Mahindra & Mahindra’s September-quarter results. Tyre makers, though, are paying far more for natural rubber and crude-linked materials than they were a year ago.

Rating agency ICRA has said operating margins for tyre manufacturers are likely to contract in FY2027 because of higher raw material costs linked to the spike in crude prices. Peers are feeling the same squeeze: Apollo Tyres has said its India raw material costs rose about 25% from April 2026, while its price actions in the replacement segment reached up to 15%.

For investors tracking the MRF Q2 results, the central question is how far tyre companies can keep raising prices in the price-sensitive replacement market without denting volumes.

MRF said it expects continued disruption and volatility in commodity markets, with raw material and logistics costs likely to stay elevated. It added that it would keep taking measured steps to deal with the pressure.

The December quarter will show whether recent price increases are starting to catch up with input costs. Until then, tyre raw material costs remain the biggest swing factor for earnings across the sector. Readers can follow more quarterly earnings coverage in our Business News section.

Full details of the results are available in the company’s exchange filings on the NSE.