In a historic achievement, shares of MRF, the Indian multinational tyre manufacturer, have crossed the remarkable ₹1 lakh mark, making it the first Indian company to achieve this milestone in terms of absolute value. This surge in share price highlights the incredible multibagger returns that investors have enjoyed over the past decade.
The stock, which first surpassed the ₹10,000 mark on February 21, 2012, has witnessed a staggering 900 percent gain since then. On the recent trading day, MRF shares climbed to ₹1 lakh, solidifying its position as a standout performer in the market. It is worth noting that it took the stock more than two years to surpass ₹90,000, a record it achieved on January 20, 2021, before reaching its previous high of ₹99,933 on May 8.
Throughout this impressive growth trajectory, MRF has consistently rewarded its shareholders with dividends, while refraining from issuing bonus shares or conducting stock splits. The company recently declared a final dividend of ₹169 per share, resulting in a total dividend payout of ₹175 for the financial year 2023.
MRF’s strong financial performance further supports its remarkable stock price surge. The company reported a net profit of ₹410.7 crore for the March quarter, marking a substantial 161.5 percent growth compared to the previous year’s ₹157 crore. Its earnings before interest, taxes, depreciation, and amortisation (EBITDA) of ₹843.1 crore in the same quarter were nearly 60 percent higher than the ₹527.6 crore reported in the corresponding period of 2022.
Despite its remarkable achievements, MRF’s shares have garnered mixed opinions from analysts. Out of the 12 analysts tracking MRF, 10 have issued sell recommendations. Elara Capital, one of the few brokerages with a positive outlook, emphasized the company’s diversified revenue streams and robust balance sheet strength, which provide resilience during market fluctuations. Elara Capital raised its price target on MRF to ₹1 lakh.
On the contrary, Motilal Oswal expressed concerns about MRF’s weakened competitive positioning within the sector and the potential impact on its pricing power. The brokerage firm cited limited expansion in return ratios due to upcoming capital expenditures. Motilal Oswal has a sell rating on MRF and set a price target of ₹75,000.
Kotak Securities, with the lowest price target of ₹66,000, highlights the premium valuation of MRF compared to its peers. Despite differing opinions among analysts, MRF’s achievement as the first Indian stock to surpass the ₹1 lakh mark showcases its enduring strength in the market.
As MRF continues to set new milestones and deliver strong financial results, investors and industry experts eagerly anticipate the company’s future performance and its impact on the overall market.
