Q4 FY25 Performance Overview

Leading Indian tyre manufacturer MRF Limited announced its fourth-quarter results for the fiscal year 2025 on Wednesday, reporting a significant 29% year-on-year growth in consolidated net profit, which reached ₹512 crore. This impressive quarterly performance was accompanied by an 11% increase in consolidated revenue, which stood at ₹7,074 crore compared to ₹6,349 crore in the same quarter of the previous fiscal year.

The Q4 results highlight MRF’s resilience and strategic market positioning despite ongoing challenges in the automotive sector and fluctuating raw material costs. The company’s quarterly performance reflects its ability to capitalize on growing demand across various market segments while effectively managing operational costs.

Key Financial Metrics

While MRF demonstrated strong quarterly performance, the full fiscal year 2025 presented a more complex picture. Despite achieving a 12% growth in revenue for FY25, the company’s consolidated net profit for the entire fiscal year declined to ₹1,869 crore from ₹2,081 crore in FY24, representing a decrease of approximately 10.2%.

The company attributed this annual profit decline primarily to increased input costs that impacted overall margins throughout much of the fiscal year. However, the strong fourth-quarter performance indicates a potential turnaround in profitability as the company implemented strategic price adjustments and benefited from improving market conditions.

Export Performance and Growth

A standout aspect of MRF’s financial results was the robust performance of its export segment. The company’s consolidated exports for FY25 reached ₹2,321 crore compared to ₹1,887 crore in the previous financial year, registering an impressive increase of approximately 23% year-on-year.

This exceptional export growth highlights MRF’s successful penetration into international markets and its ability to compete effectively on the global stage. The export performance is particularly noteworthy given the challenging global economic environment and trade disruptions that have affected international commerce during parts of the fiscal year.

Market Segment Analysis

According to MRF’s statement, all three key market segments — Replacement, Institutional, and Export — registered strong growth during the financial year 2024-25. This balanced growth across segments indicates the company’s well-diversified market approach and its ability to capitalize on opportunities across various customer categories.

The replacement market, which typically offers higher margins compared to OEM sales, showed resilience despite competitive pressures. The institutional segment’s growth reflects MRF’s strong relationships with key clients and its reputation for quality and reliability. Meanwhile, the export segment’s exceptional performance, as previously highlighted, contributed significantly to overall revenue growth.

MRF’s Position in the EV Market

MRF highlighted its continued significance in the rapidly growing electric vehicle (EV) market, noting that in addition to conventional internal combustion engine (ICE) vehicles, the company maintains a substantial presence in the EV sector. According to its statement, MRF supplies tyres to all major Original Equipment Manufacturers (OEMs) across Commercial, Passenger, and 2/3 Wheeler segments in the EV space.

This strategic positioning in the EV market is particularly important as the automotive industry undergoes a transformative shift toward electrification. By establishing itself as a key supplier to EV manufacturers, MRF is ensuring its relevance and growth potential in this emerging market segment, which is expected to see accelerated adoption in the coming years.

The company’s focus on serving both traditional ICE vehicles and new-age EVs demonstrates its forward-looking approach and ability to adapt to changing market dynamics. This dual strategy allows MRF to benefit from current demand while preparing for future industry transitions.

Raw Material Cost Impact

According to MRF, raw material costs marginally softened in the fourth quarter compared to the levels observed in the third quarter of FY25. This easing of input costs likely contributed to the strong profit performance in Q4, partially offsetting the challenges faced earlier in the fiscal year.

Throughout the year, MRF implemented strategic price increases, which helped mitigate the impact of rising input costs to some extent. These pricing adjustments, combined with the moderate softening of raw material prices toward the end of the fiscal year, created a more favorable cost environment for the fourth quarter.

The company’s ability to effectively manage its pricing strategy while maintaining market competitiveness demonstrates its strong brand position and pricing power in the market. This balanced approach to cost management and pricing has helped MRF navigate the challenging input cost environment that has affected the entire tyre industry.

Dividend Announcement for FY25

MRF announced a substantial dividend for the financial year 2024-25, declaring a total dividend of ₹235 per share (2350% on a face value of ₹10 each). This impressive dividend payout includes two interim dividends of ₹3 each (30% per share) that have already been distributed to shareholders.

The generous dividend announcement, despite the annual profit decline, reflects the company’s commitment to shareholder returns and its confidence in long-term business prospects. It also demonstrates MRF’s strong cash generation capabilities and financial health, allowing it to maintain its tradition of substantial dividend payments even during periods of margin pressure.

The dividend announcement was likely received positively by investors, as evidenced by the subsequent 4% rise in MRF’s share price on the day of the results announcement.

Stock Market Performance

Shares of MRF responded favorably to the quarterly results announcement, ending the trading day at ₹140,428.70 on the BSE, representing a significant 4% increase on Wednesday. This positive stock movement indicates investor confidence in the company’s performance and future outlook, particularly the strong quarterly profit growth and export performance.

MRF continues to be one of the highest-priced stocks on the Indian stock exchanges, with its share price consistently trading at premium levels. The strong Q4 results and promising export growth have reinforced investor sentiment about the company’s ability to navigate challenging market conditions while maintaining its industry leadership position.

The stock performance also reflects market recognition of MRF’s strategic positioning in both traditional automotive segments and the emerging EV sector, providing a balanced growth trajectory for the company.

Future Outlook and Industry Perspective

While MRF did not provide specific forward guidance in its results announcement, the strong performance in Q4 FY25, particularly in exports and across all market segments, suggests a positive momentum heading into the new fiscal year. The company’s strategic focus on both traditional ICE vehicles and the growing EV market positions it well for future growth opportunities.

The tyre industry in India continues to face both challenges and opportunities. On one hand, raw material cost volatilities and intense competition remain ongoing concerns. On the other hand, the automotive sector’s recovery, growing vehicle sales, and the expansion of the EV ecosystem present significant growth avenues for well-positioned players like MRF.

The company’s demonstrated ability to grow exports substantially (23% year-on-year) also opens up additional growth potential through international market expansion, potentially reducing dependence on domestic market conditions.

For investors and industry observers, MRF’s Q4 results offer a glimpse into both the resilience and adaptability of a market leader navigating complex industry dynamics while maintaining a focus on innovation, market expansion, and shareholder returns.