MRF September-quarter profit falls 28% as material costs rise

MRF Limited reported standalone profit of Rs 369.15 crore for the quarter ended 30 September 2026, down 28% from Rs 511.59 crore a year earlier, as cost of materials consumed rose 44% to Rs 6,538.07 crore despite an 18% increase in revenue from operations to Rs 8,523.96 crore.

Why did MRF's September-quarter profit decline?

MRF's standalone profit declined because the increase in material consumption and total expenses exceeded revenue growth in the quarter ended 30 September 2026. Cost of materials consumed rose by Rs 1,994.84 crore from Rs 4,543.23 crore a year earlier, while revenue from operations increased by Rs 1,274.28 crore from Rs 7,249.68 crore. Total expenses consequently increased 22% to Rs 8,153.50 crore, compared with an 18% rise in total income to Rs 8,651.63 crore.

Profit before tax fell 27% to Rs 498.13 crore from Rs 682.41 crore in the September 2025 quarter and was also lower than Rs 624.54 crore in the preceding June 2026 quarter. Current tax fell to Rs 118.28 crore from Rs 160.31 crore, while deferred tax was Rs 10.70 crore. Earnings per share, not annualised, declined to Rs 870.40 from Rs 1,206.26.

How did MRF's sales and expense mix change?

MRF generated Rs 8,523.96 crore of revenue from operations in the September 2026 quarter, up from Rs 7,249.68 crore in the corresponding quarter of 2025. Other income increased to Rs 127.67 crore from Rs 106.70 crore, taking total income to Rs 8,651.63 crore. MRF reports rubber products including tyres, tubes, flaps and tread rubber as one primary operating segment under Indian Accounting Standard 108.

The expense composition changed most sharply in materials and inventory movements. Materials consumed were Rs 6,538.07 crore in the quarter, while changes in inventories of finished goods, stock-in-trade and work-in-progress were negative Rs 728.11 crore, against a positive Rs 58.58 crore a year earlier. Employee benefits rose to Rs 506.59 crore from Rs 481.58 crore, depreciation and amortisation reached Rs 467.95 crore from Rs 443.27 crore, and other expenses increased to Rs 1,284.56 crore from Rs 1,066.35 crore.

How did MRF perform in the first half of 2026-27?

MRF's standalone profit for the half year ended 30 September 2026 fell 15% to Rs 843.52 crore from Rs 995.82 crore in the prior-year half, while revenue from operations rose 14% to Rs 16,815.52 crore. Profit before tax declined to Rs 1,122.67 crore from Rs 1,333.14 crore, while total income rose to Rs 17,134.67 crore from Rs 15,042.15 crore.

First-half materials consumption increased 35% to Rs 12,362.14 crore from Rs 9,140.56 crore, while total expenses rose to Rs 16,012.00 crore from Rs 13,709.01 crore. Finance costs moved lower to Rs 143.88 crore from Rs 152.93 crore, but depreciation and amortisation increased to Rs 913.79 crore from Rs 870.22 crore. Total comprehensive income for the half year was Rs 852.92 crore, compared with Rs 1,014.26 crore a year earlier.

What changed in MRF's balance sheet and cash flow?

MRF's total assets stood at Rs 34,190.39 crore on 30 September 2026, compared with Rs 31,296.46 crore on 31 March 2026. Inventories rose to Rs 7,083.63 crore from Rs 5,337.66 crore, and trade receivables increased to Rs 3,887.98 crore from Rs 3,477.27 crore. Bank balances other than cash and cash equivalents increased to Rs 4,778.63 crore from Rs 1,763.97 crore, while cash and cash equivalents declined to Rs 162.02 crore from Rs 260.84 crore.

Net cash from operating activities was Rs 1,238.76 crore in the half year, down from Rs 2,015.93 crore a year earlier, after working-capital movements including Rs 997.63 crore in raw-material and other inventories. MRF spent Rs 1,001.60 crore on property, plant and equipment, versus Rs 618.42 crore in the previous first half, and used Rs 1,357.26 crore in investing activities. Financing activities generated Rs 24.37 crore, compared with an outflow of Rs 635.48 crore, after Rs 531.38 crore of net proceeds from working-capital facilities and Rs 200.00 crore of term-loan repayment.

What dividend and credit-rating actions did MRF disclose?

MRF's board approved an interim dividend of Rs 3 per equity share of face value Rs 10 for the financial year ending 31 March 2027. The record date is 17 November 2026, and MRF said the dividend would be paid on or after 1 December 2026. The board approved the financial results and dividend on 10 November 2026.

CARE reaffirmed MRF's CARE AAA rating for its long-term banking facility and CARE A1+ rating for its short-term banking facility, according to the results notes. The standalone results were subject to a limited review, and the auditors said nothing had come to their attention that caused them to believe the statement failed to make the required disclosures or contained a material misstatement. The auditors stated that a limited review has a substantially narrower scope than an audit.

Conclusion

MRF's September-quarter results show that 18% growth in standalone revenue did not offset a 44% increase in material consumption. The resulting 22% rise in total expenses reduced quarterly profit by 28% to Rs 369.15 crore, while first-half profit declined 15% to Rs 843.52 crore despite 14% revenue growth.

The next scheduled event disclosed by MRF is the interim dividend of Rs 3 per share. Its record date is 17 November 2026 and payment is scheduled on or after 1 December 2026.