12 Aug , 2026 By : Debdeep Gupta
MRF shares traded marginally lower on Wednesday, August 12, extending losses from the previous session after a weak June-quarter operating performance. H0wever, brokerage CLSA maintained an 'Outperform' rating on the tyre maker and expects margins to recover sequentially.
MRF stock was trading at Rs 1,30,845 in morning trade, down 0.21 percent for the day. The stock had fallen 2.04 percent on Tuesday after the company announced its Q1 FY27 results. The tyre maker has declined 13.4 percent so far in 2026, compared with a 6.5 percent fall in the Nifty 50 over the same period. MRF's market capitalisation stood at around Rs 55,450 crore.
CLSA sees 26% upside in MRF
CLSA maintained an 'Outperform' call on MRF with a target price of Rs 1,65,240 per share, implying an upside of around 26 percent from Tuesday's closing price. The brokerage highlighted the sharp margin pressure during the April-June quarter, noting that MRF's EBITDA margin declined 453 basis points sequentially and came in below its estimate. The weakness was driven by a 566-basis-point sequential contraction in gross margin as raw-material costs increased sharply by...
Despite the weak Q1 profitability, CLSA expects the pressure on margins to ease in the coming quarters. The tyre industry has already implemented price increases of around 7-9 percent and further hikes are planned during Q2 FY27, according to the brokerage.
CLSA expects MRF's margin to improve sequentially as the company benefits from the full-quarter impact of the price increases. Further price hikes and the pass-through of higher costs to original equipment manufacturers (OEMs) should also aid the margin recovery.
MRF Q1 results
MRF reported a decline in earnings for the June quarter as higher costs weighed on profitability despite growth in revenue. EBITDA fell 7.46 percent year-on-year to Rs 990.63 crore from Rs 1,070.43 crore, while the EBITDA margin contracted to 11.77 percent from 13.95 percent a year earlier. Revenue rose 9.64 percent year-on-year to Rs 8,415.50 crore. The weak profitability had weighed on the stock on Tuesday, when MRF shares fell more than 2 percent following the results.
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