MRF commissions phase-I of Rs 4,500 crore Gujarat unit

MRF, a leading tyre maker company, partially started the Phase 1 of its Greenfield unit at Dahej Industrial area, Gujarat.

According to the company, with an outlay of Rs 4,500 crore (US$ 643.87 million), the Gujarat project would be one of its largest projects. The new factory complex is expected to produce a million tyres a month.

Gujarat has emerged as an important destination for an automotive manufacturing unit. Thus, the company intends to use the new factory at Gujarat to serve both the domestic and export demand. Currently, big car factories of Tata, Ford, Maruti Suzuki, Honda and two-wheeler units of Honda and Hero, among others are present in Gujarat.

Although, MRF has reported a 15 per cent fall in its standalone net profit at Rs 237 crore (US$ 33.91 million) for the quarter ended December 31, 2019 when compared with Rs 279 crore (US$ 39.92 million) in a year-ago period.

The company also witnessed a marginal fall in its revenue Rs 4,009 crore (US$ 573.62 million) from Rs 4,034 crore (US$ 577.19 million) in Q3 of previous fiscal. Though automotive OEM demand was slow, replacement demand was decent. A major portion of company’s revenue comes from the replacement business.

As material costs were lower at Rs 2,313 crore (US$ 330.95 million) compared to Rs 2,712 crore (US$ 388.04 million), depreciation and amortisation expenses were higher at Rs 249 crore (US$ 35.63 million) as against Rs 205 crore (US$ 29.33 million). The finance costs were also higher at Rs 70 core (US$ 10.02 million) from Rs 63 crore (US$ 9.01 million). Its profit before exceptional items and tax stood at Rs 364 crore (US$ 52.08 million) as against Rs 409 crore (US$ 58.52 million).

The net profit of the company was lower at Rs 726 crore (US$ 103.88 million) for the nine-month period ended December 31, 2019. Though, there was increase in the total revenues at Rs 12,366 crore (US$ 1.77 billion) when compared with Rs 11,764 crore (US$ 1.68 billion) in the same period the previous year.

According to the statement, the board has declared a second interim dividend of Rs 3 (US$ 0.04) per equity share (30 per cent).

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.