MRF: Profits halved thanks to unprecedented material cost rises

Indian tyre maker MRF Limited has reported a standalone income of Rs 193.04 billion (£2.03 billion) for the financial year ending 31 March 2022, a 19.7 per cent increase on the previous year’s result. Exports were slightly up, being valued at Rs 17.79 billion (£186.80 million), compared with Rs 13.33 billion for the prior financial year. Standalone net profit, however, dropped 48.2 per cent year-on-year to Rs 6.47 billion (£67.94 million).

Rising raw material costs hit the tyre maker, with MRF reporting it was “unable to recover fully” these cost increases “despite its best efforts.” It adds that the increase in raw material costs has been at an “unprecedented level.” Furthermore, post-pandemic market conditions have not favoured absorbing frequent price increases, but MRF says it will “do its best to recover the cost increases in the coming months.”

Other factors affecting the bottom line include uncertainties posed by the COVID-19 pandemic in the early part of the financial year, issues connected with availability of raw materials and challenges posed by the war in Ukraine.