MRF Q3 Results: Profit Doubles to ₹692 Cr, Stock Jumps 8%

Introduction

MRF Ltd., a leading tyre manufacturer in India, announced a robust financial performance for the third quarter ending December 31, 2025. The company reported a significant surge in profitability and revenue, which led to a positive reaction in the stock market. Following the results, MRF's board also declared its second interim dividend for the financial year, rewarding its shareholders.

Stellar Financial Performance

MRF's consolidated revenue from operations for the December quarter stood at ₹8,050.4 crore, marking a substantial 15% growth compared to the ₹7,000 crore recorded in the same period of the previous fiscal year. This top-line growth indicates healthy demand and strong business execution during the quarter.

The company's operational efficiency saw a remarkable improvement. Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) grew by an impressive 68% year-on-year, reaching ₹1,399 crore from ₹834 crore. This strong operational leverage resulted in a significant expansion of EBITDA margins, which widened by 450 basis points to 17.4% from 11.9% in the corresponding quarter last year.

Profitability More Than Doubles

The most significant highlight of the quarter was the sharp increase in net profit. The consolidated net profit after tax surged by 119% to ₹691.8 crore, more than doubling from the ₹316 crore reported in Q3 of the previous year. This growth was achieved despite a one-time exceptional expense of ₹77.2 crore. This charge was related to an increase in gratuity and leave liability due to legislative amendments under the new labour codes.

Key Financial Metrics

To provide a clear comparison, the key financial figures for the quarter are summarized below:

Dividend Announcement for Shareholders

In a move that reflects the company's strong financial health and commitment to its investors, the MRF board approved a second interim dividend. A dividend of ₹3 per equity share (30% of face value) has been declared for the financial year ending March 31, 2026. The company has fixed Friday, February 13, 2026, as the record date to determine shareholder eligibility. The dividend payment will be made on or after Friday, February 27, 2026.

Market Reaction and Stock Performance

Investors responded positively to the strong earnings report. On the day of the announcement, February 6, 2026, shares of MRF surged as much as 8%. The stock was trading 6.7% higher at ₹1,43,900 following the results. This positive momentum adds to the stock's solid performance over the past year, during which it has delivered a return of 26% to its investors.

Analysis of Performance

The sharp improvement in MRF's profitability can be attributed to its strong operating performance. The significant expansion in margins suggests that the company has managed its costs effectively while benefiting from healthy revenue growth. The ability to pass on costs and improve operational leverage has been a key driver behind the doubling of its net profit. The company's balance sheet remains robust, with a low consolidated debt-to-equity ratio of 0.03, indicating strong financial stability.

Conclusion

MRF's third-quarter results for FY26 have demonstrated exceptional growth in both revenue and profitability, driven by strong operational efficiency. The doubling of net profit and the subsequent 8% jump in its stock price underscore the market's confidence in the company's performance. The declaration of an interim dividend further enhances shareholder value. The company's ability to navigate market conditions and deliver strong financial results positions it well for the future.