Hit by spike in raw material cost, MRF net profit dips 54% to Rs 189 cr

The company's revenue from operations was up 16% YoY to Rs 4,908 crore

Tyre industry major MRF Ltd has posted a 54 per cent drop in its consolidated net profit for the second quarter of the current financial year to Rs 189 crore, from Rs 411 crore during the July-September quarter of 2020-21, mainly owing to higher raw material prices.

The company’s revenue from operations was seen up by 16 per cent from Rs 4,244 crore during Q2 2020-21 to Rs 4,908 crore during the same period in 2021-22. During the period under review, the cost of raw materials saw an increase of 69 per cent to Rs 3,839 crore as compared to Rs 2,272 crore during the July to September quarter of the previous financial year.

Changes in inventories of finished goods saw a loss of Rs 691 crore during Q2 this year, as against a gain of Rs 80 crore during the same period last year. Owing to higher raw material prices, total expenses were also seen up by 28 per cent from Rs 3718 crore in Q2 2020-21 to Rs 4,741 crore in Q2 this fiscal.

The Board of Directors of the company has declared an interim dividend of Rs 3 per equity share (30 per cent) for the current financial year.