MRF Q3 Profit Doubles to ₹692 Crore, Shares Surge 9%

Introduction

Tyre manufacturing major MRF Ltd announced a stellar performance for the third quarter of the financial year 2025-26, with its consolidated net profit more than doubling. The robust earnings report, released on February 6, 2026, triggered a strong positive reaction in the market, with the company's shares surging significantly. The board also rewarded shareholders by declaring an interim dividend.

A Deep Dive into Q3 Financials

MRF reported a consolidated net profit of ₹692 crore for the quarter ended December 31, 2025. This represents a massive 119% increase compared to the ₹315.46 crore profit recorded in the same quarter of the previous fiscal year (Q3 FY25). The growth momentum was also strong on a sequential basis, with the profit rising 31.6% from ₹525.64 crore in the preceding quarter (Q2 FY26).

The company's top line also showed healthy growth. Revenue from operations for the quarter stood at ₹8,050.43 crore, marking a 15% year-on-year increase from ₹7,000.82 crore. Sequentially, the revenue grew by 9.1% from ₹7,378.72 crore, indicating sustained demand and operational execution.

Operational Efficiency Boosts Margins

A key driver of the impressive profitability was a significant improvement in operational efficiency. The company's Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA), excluding other income, grew by a substantial 68% to approximately ₹1,399 crore from the year-ago period. This strong operational performance led to a sharp expansion in operating margins, which climbed to 17.4% in Q3 FY26 from 11.9% in the corresponding quarter last year. This expansion of nearly 450 basis points highlights the company's ability to manage costs effectively.

One-Time Expense Noted

The financial results included an exceptional expense of ₹77.20 crore. The company clarified that this charge pertains to a one-time increase in gratuity and leave liability. This adjustment arises from past service costs due to legislative amendments under the new labour codes. The strong bottom-line growth was achieved despite accounting for this non-recurring expense.

Shareholder Payout: Interim Dividend Declared

In light of the strong performance, the MRF board of directors declared a second interim dividend of ₹3 per equity share for the financial year ending March 31, 2026. The company has fixed Friday, February 13, 2026, as the record date to determine shareholder eligibility for the dividend payment. The dividend is scheduled to be paid to eligible shareholders on or after Friday, February 27, 2026.

Market Reaction

The stock market gave a resounding approval to MRF's quarterly performance. Following the announcement, the company's shares surged in trade. On the BSE, the stock gained as much as 8.95% to trade at ₹1,47,004.90 per share. The strong buying interest reflected investor confidence in the company's growth trajectory and improved profitability.

Q3 FY26 Performance Snapshot

Analysis of Performance

The sharp increase in profitability, far outpacing revenue growth, points towards successful cost control measures and potentially favorable raw material costs during the quarter. The significant margin expansion is a critical indicator of the company's operational health and its ability to translate sales into higher profits. This performance places MRF in a strong position within the competitive tyre industry, demonstrating resilience and strategic execution.

Conclusion

MRF's third-quarter results for FY26 have set a high benchmark, characterized by a doubling of net profit and a substantial improvement in operating margins. The performance underscores the company's robust operational framework and its ability to capitalize on market conditions. For investors, the immediate reward comes in the form of an interim dividend and a significant appreciation in the stock's value. The focus will now shift to whether the company can sustain this high-growth momentum in the upcoming quarters.