Tyre stock MRF, which sped past the Rs 60,000 mark for the first ever time on Monday, hit a new all-time high of Rs 60,298 in early trades this morning before turning direction on profit taking. At Rs 59,665 (down 0.4%), MRF remains the costliest stock in the market, although in terms of valuation, it is not ranked first. At a PE of around 16.5 to its trailing 12-month earnings, the stock is behind Balkrishna Industries, which has a PE of about 18.5.
Balkrishna Industries is trading nearly 1% up at Rs 1430. Among other stocks in the tyre space, Modi Rubber is up nearly 10% and Krypton is gaining 2.1%, while Elgi Rubber and Govind Rubber are up marginally.
Good Year, Apollo Tyres, Ceat and JK Tyre & Industries are down 0.4% - 1%. TVS Srichakra is declining by about 1.2%, while PTL Enterprises is down more than 4%.
In late September 2016, MRF rallied past the magical Rs 50,000 mark. Around that time, the stock was quoting at PE of around 10 times its estimated 2017 earnings, as compared to industry average of 11.5. The book value then was around Rs 16,200 a share.
It was said then that the tyre industry was poised to reap benefits of surging demand, although revenue growth may turn out to be just modest for some players in the segment. MRF, for its part, has really done well, providing investors with fairly handsome returns in six months since September 2016.
MRF posted a net profit of Rs 288.08 crore in the quarter ended December 31, 2016 as compared to Rs 415.59 crore for the quarter ended December 31, 2015. Total income increased from Rs 3625.86 crore for the quarter ended December 31, 2015 to Rs 3707.14 crore for the quarter ended December 31, 2016. The drop in net profit was due to 13.4% yoy increase in finance cost.
