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MRF, a leading tyre manufacturer in India, has reported a significant decline in its net profit for the September 2024 quarter. The company's consolidated net profit fell by 19.77% year-on-year to Rs. 500 crore, compared to Rs. 623 crore in the same period last year. This downturn comes on the heels of a decline in revenue, which also witnessed a dip of 8.91% to Rs. 4,000 crore, down from Rs. 4,400 crore in the previous year.
The company attributed the decline in its financial performance to a confluence of factors. Chief among them is the slowdown in demand across various segments, including passenger vehicles, commercial vehicles, and two-wheelers. This is largely a result of the global economic uncertainties, rising inflation, and a cooling off in consumer sentiment. Coupled with this, MRF has also faced headwinds from escalating input costs, including the price of natural rubber, steel, and other raw materials. This has squeezed profit margins, further contributing to the decline in net profit.
Despite the challenges, MRF remains optimistic about the long-term prospects of the Indian tyre market. The company is investing in new technologies and expanding its product portfolio to cater to evolving customer needs. It is also focusing on enhancing operational efficiency and cost optimization measures to mitigate the impact of rising input costs. The company believes that the Indian economy will eventually rebound, and demand for tyres will see a resurgence, driving future growth for MRF.
Source: MRF consolidated net profit declines 19.77% in the September 2024 quarter