Operating profit stood at Rs 445mn vis a vis Rs 681mn. Profitability was hit this quarter. The prices of raw materials such as carbon black, tyre chords and synthetic rubber have remained firm in recent times. Given the slowdown in demand and increasing competition, the company has not been able to rise prices to accommodate the rise in input costs. Tyre industry is characterised by high volume and low margins.
Margins are under huge pressure and the company has to tread carefully in a difficult market.
MRF is riding on the strength of its strong brand name and should increase its presence in OEM market for fighting the growing competition from global and national majors. A fortune in black gold. All rights reserved.