Please refer to important disclosures at the end of this report
1
MRF Limited is engaged in the manufacture and sale of automotive tires, tubes
and flaps, among others. The Company also manufactures rubber products,
such as tread rubber and conveyor belt. Dominant in all segments as well as a
leader in the replacement market, MRF is the only company commanding a
premium in all categories. Despite stiff competition from Chinese imports, it is
expected to race ahead of the industry due to its higher OE growth and its
leading position in the replacement market. Demand (especially in rural area)
because of the good monsoon would enable higher bias capacity utilisation,
which in turn would provide a cushion to margins in the context of rising rubbe
r
prices. Also, we believe that it would be able to pass on any increase in rubbe
r
prices owing to its leading position. The Company is expected to generate
healthy cash-flow from operations going forward. The company has good
consistent profit growth of 45.65% CAGR over the last 5 years and has a good
return on equity (ROE) of 30.89% for the last 3 years. Hence Buy.
BUY
CMP `49,199
Stock Info
Sector
Beta 0.8
Bloomberg Code
Shareholding Pattern (%)
Promoters 27.5
MF / Banks / Indian Fls 35.3
FII / NRIs / OCBs 9.3
Indian Public / Others 27.9
Abs. (%) 3m 1yr 3yr
Sensex (7.0) 2.5 25.4
MRF 34.5 26.3 190.5
Reuters Code MRF.BO
10
BSE Sensex 26,150
Nifty 8,074
Face Value (
`
)
Tyre
Market Cap (
`
cr) 20,860
52 Week High / Low 54601/30464
Avg. Daily Volume 1,647
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
MRF
Others | Tyre
November 21, 2016
MRF | Tyre
November 21, 2016
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement MRF
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)