New Delhi: Tyre maker MRF Ltd on Tuesday reported a 22.8% decline in net profit to Rs 417.19 crore for the July-September quarter, as higher raw material costs offset double-digit revenue growth. The Chennai-based company had posted a consolidated net profit of Rs 540.13 crore in the year-ago period, according to an exchange filing.
Revenue from operations rose 17.4% to Rs 8,660.19 crore from Rs 7,378.72 crore a year earlier.
"The company delivered strong double-digit sales growth in the second quarter. We were able to capitalise on sustained demand for the company's products from both OE and replacement segments," MRF said in a press release.
Read more: Kalyan Jewellers Q2 Results: Net profit jumps 64% YoY to Rs 427 crore, revenue rises 31%
Total expenses increased 21.8% to Rs 8,269.77 crore in the September quarter from Rs 6,788.55 crore a year earlier. The cost of materials rose 43.2% to Rs 6,552.57 crore from Rs 4,577.49 crore.
The sharp rise in raw material prices amid global uncertainties adversely affected profitability during the quarter. Price increases and cost-saving measures helped mitigate the pressure, MRF said.
Read more: AI stocks: Are the days of easy money over? Aswath Damodaran warns investors of a new market reality ahead of Anthropic IPO
The company expects continued disruptions and volatility in commodity markets, with raw material and logistics costs likely to remain elevated. "We will continue to take measured steps to address these challenges," it added. Meanwhile, the company's board declared an interim dividend of Rs 3 per share. MRF has fixed November 17 as the record date, with payment scheduled on or after December 1.
