MRF Share Price Soars to Record High
The shares of MRF Ltd, renowned for being the most expensive stock in the Indian stock market, have climbed even higher. The tyre manufacturer's stock has witnessed a spectacular rally, surging 54% from its March lows to trade at the current level of ₹157,165. In a landmark moment this October, the stock breached the ₹1.6 lakh mark for the first time, achieving a fresh record high of ₹1,63,600 per share.
Analysts Sound Alarm on Loosing Shine
Despite the impressive price action, market analysts are turning cautious. They believe the current rally may be nearing its end, pointing to the company's September quarter results which failed to impress, even though margins exceeded expectations.
Domestic brokerage firm Motilal Oswal has highlighted that the recent surge has made MRF trade at 32.5x and 27.6x FY26E and FY27E EPS. This is above its 10-year average of 25x, making it expensive compared to its industry peers. The brokerage noted that MRF's competitive position in the sector has weakened over the past few years, evident from its diluted pricing power in the PCR and TBR segments.
Motilal Oswal expects MRF to focus on recovering its lost market share, a move that is likely to limit margin growth even in a favourable falling input cost environment. Overall, the brokerage forecasts MRF to deliver a 13% earnings CAGR over FY25–28. Consequently, it has retained its 'Sell' rating with a target price of ₹1,21,162 per share, indicating a potential 23% downside from the latest closing price.
Echoing a similar sentiment, Kotak Securities also maintained its Sell rating on the stock. While it revised its target price slightly upwards to ₹1.28 lakh from ₹1.22 lakh, it described MRF's Q2 performance as relatively weak and stated that valuations remain expensive. Kotak did, however, acknowledge that softer crude oil and natural rubber prices should support margins and that MRF is expected to outperform its peers, albeit at a slower pace.
MRF's Q2FY26 Financial Performance
The company reported its September quarter results, showing an 11.7% year-on-year rise in consolidated net profit at ₹525.64 crore. This was an increase from the ₹470.7 crore profit recorded in the same quarter last fiscal year.
Consolidated revenue from operations for the second quarter stood at ₹7,378.72 crore, up from ₹6,881.09 crore a year ago. The company's EBITDA grew to ₹1,126 crore from ₹1,011 crore, with margins coming in at 15%.
A Look Back at MRF's Stellar Journey
MRF's stock has had a remarkable run. Starting the year at around ₹1,30,000 apiece, the shares have gained 21% year-to-date. A key milestone was achieved in June 2023, when MRF became the first Indian company to see its stock price cross the ₹1,00,000 mark.
Over the past 16 years, the stock has ended 12 years with positive returns. The standout year was CY14 with a massive 96% rally, followed by a 48% gain in CY17. Throughout this extended period, the stock has delivered an astronomical growth of 7,746%, cementing its legendary status among Indian investors.
