MRF Stock Surges 9% on 121% Q3 Profit Jump, Dividend News

Introduction

Shares of tyre manufacturer MRF Ltd. surged by as much as 9% on Friday, February 6, 2026, reaching an intraday high of ₹1,49,070. The sharp buying interest was triggered by the company's announcement of strong financial results for the third quarter of the fiscal year 2025-26, which included a more than doubling of its net profit and the declaration of a second interim dividend. The stock ultimately closed the session at ₹1,46,495.05, marking an 8.57% gain.

Stellar Q3 Financial Performance

MRF reported a consolidated net profit of ₹691 crore for the December-ended quarter, a remarkable 121% year-on-year increase from the ₹316 crore profit recorded in the same period last year. This significant growth in profitability underscores the company's strong operational efficiency and favourable market conditions.

The company's revenue from operations also saw healthy growth, rising by 15% to ₹8,050.43 crore in Q3 FY26 from ₹7,000.82 crore in the corresponding quarter of the previous year. This top-line growth was supported by steady demand across its various product segments.

Margin Expansion and Operational Efficiency

A key highlight of the quarter was the substantial improvement in operating margins. MRF's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) surged by 68% to ₹1,399 crore, compared to ₹834 crore a year earlier. Consequently, the EBITDA margin expanded significantly to 17.4% from 11.9% in the same quarter last year, one of the strongest margin performances for the company in recent times.

While total expenses rose to ₹7,180 crore from ₹6,675 crore, the robust revenue growth and margin expansion more than compensated for the increased costs. The company's earnings per share (EPS) for the quarter improved dramatically to ₹1,631.23 from ₹743.80 in the year-ago period.

Dividend Announcement for Shareholders

Adding to the positive investor sentiment, MRF's Board of Directors approved a second interim dividend of ₹3 per equity share for the financial year 2025-26. This dividend represents 30% of the stock's face value of ₹10. The company has set Friday, February 13, 2026, as the record date to determine shareholder eligibility. The dividend payment is scheduled to be completed on or after February 27, 2026.

Market Reaction and Stock Details

The strong quarterly report and dividend news were well-received by the market, pushing the stock price up significantly. The trading volume for the day was 58,106 shares, substantially higher than its 20-day average volume of 6,458 shares, indicating strong investor participation. With the day's gains, MRF's market capitalization stood at approximately ₹62,130 crore.

The stock is currently trading about 10% below its 52-week high of ₹1,63,600, which it reached on October 24, 2025. Its 52-week low is ₹102,124.05.

Shareholding Pattern Insights

While the company's performance has been strong, recent shareholding data indicates minor changes. Promoter holdings saw a slight decrease from 27.75% to 27.73% in the December 2025 quarter. Similarly, Foreign Institutional Investors (FIIs) also reduced their stake from 18.27% to 18.17% during the same period. In contrast, Domestic Institutional Investors (DIIs) increased their holding from 12.38% to 12.51%.

Company Outlook

MRF's management remains optimistic about the future, citing a favorable demand environment. The company is expected to benefit from a pickup in the rural economy and increased production from Original Equipment Manufacturers (OEMs). Furthermore, the government's focus on infrastructure development is likely to boost the commercial vehicle sector, a key market for MRF.

The latest results reinforce confidence in the company's ability to manage costs and generate strong cash flows. Despite its high absolute share price, investors appear focused on the strong earnings momentum and consistent growth delivery.

Conclusion

MRF's exceptional third-quarter performance, characterized by a massive jump in profitability and expanding margins, has solidified its position as a market leader in the tyre industry. The shareholder-friendly dividend announcement further boosted investor confidence, leading to a significant rally in its stock price. While minor shifts in promoter and FII holdings warrant observation, the company's strong operational execution and positive outlook suggest a continued focus on growth and value creation.