MRF Q3 Profit Doubles to ₹692 Crore, Stock Soars 9%

Introduction

Tyre manufacturer MRF Ltd. announced a strong financial performance for the third quarter of fiscal year 2026, ending December 31, 2025. The company's consolidated net profit more than doubled, and revenue saw a significant increase, leading to a sharp rally in its stock price. In addition to the robust earnings, the board has also declared a second interim dividend for its shareholders.

Financial Performance in Detail

For the October-December 2025 quarter, MRF reported a consolidated net profit of ₹691.83 crore. This represents a remarkable 119% year-on-year (YoY) growth compared to the ₹315.46 crore profit recorded in the same quarter of the previous fiscal year. The substantial increase in profitability highlights the company's strong operational execution and favourable market conditions.

Revenue from operations also showed healthy growth, rising by 15% YoY to ₹8,050.43 crore from ₹7,000.82 crore in the corresponding period last year. The company's total income for the quarter stood at ₹8,175.01 crore. This growth was supported by steady demand across its various product segments.

Operational Efficiency and Margin Expansion

A key highlight of the quarter was the significant improvement in operational efficiency. MRF's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) surged by 68% YoY to ₹1,399 crore, up from ₹834 crore in Q3 FY25. This strong operational profit growth led to a substantial expansion in margins.

The EBITDA margin improved to 17.4% in Q3 FY26, a sharp increase from 11.9% in the same quarter a year ago. This margin expansion underscores the company's ability to manage costs effectively and leverage its scale, even as overall expenses rose.

Key Financial Metrics: Q3 FY26 vs Q3 FY25

Dividend Announcement for Shareholders

Reflecting its strong financial position and commitment to rewarding shareholders, the MRF board declared a second interim dividend of ₹3 per equity share for the financial year 2026. This dividend has a face value of ₹10 per share.

The company has set February 13, 2026, as the record date to determine the eligibility of shareholders for this dividend payment. The dividend amount is scheduled to be paid to eligible shareholders on or after February 27, 2026. This follows a previous interim dividend of ₹3 per share announced in November 2025.

Market Reaction and Stock Performance

Investors responded positively to the strong earnings report and dividend announcement. On February 6, 2026, shares of MRF Ltd. surged by as much as 10.4% on the BSE, reaching an intraday high of ₹1,49,000. The sharp buying interest reflects renewed confidence in the company's growth trajectory and its ability to generate strong cash flows.

Expenses and Exceptional Items

While profitability soared, the company's total expenses also increased during the quarter. Expenses rose to ₹7,180.45 crore from ₹6,674.72 crore in the year-ago period, reflecting higher input and operational costs. However, the pace of revenue growth and margin expansion successfully offset this increase.

MRF also reported an exceptional expense of ₹77.20 crore during the quarter. This one-time charge was related to an increase in gratuity and leave liability due to legislative amendments under the new labour codes.

Outlook and Conclusion

The strong Q3 performance positions MRF well for the remainder of the fiscal year. Management has previously cited positive factors such as increased demand from a pick-up in the rural economy and higher production levels from Original Equipment Manufacturers (OEMs). The government's focus on infrastructure is also expected to benefit the commercial vehicle segment, a key market for MRF.

In summary, MRF's third-quarter results demonstrated robust growth in both revenue and profit, driven by significant margin expansion. The positive market reaction and the declaration of a second interim dividend underscore the company's solid financial health and favorable outlook.