MRF (MRF)
StalwartFairStock Score: 54/100 — MIXED
Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹1,33,490 |
| Market Cap | ₹56,615.02 Cr |
| P/E Ratio | 23.42 |
| ROCE | 13.62% |
| ROE | 12.06% |
| Dividend Yield | 0.35% |
| Profit Growth | -2.04% |
| Debt/Equity | 0.15 |
| Sales Growth | 10.37% |
| Free Cash Flow | ₹-214 Cr |
| Promoter Holding | 27.73% |
| 52-Week Range | ₹1,22,000 — ₹1,63,600 |
| Sector | Auto Components |
| Book Value | ₹49,454.97 |
Strengths
- Strong brand and distribution moat in Indian tyre market
- Conservative balance sheet with debt/equity of only 0.19
- Piotroski score of 8/9 and Altman Z-Score of 3.37 indicate low bankruptcy risk
- Consistent growth: 5-year revenue CAGR of 11.74% and latest profit growth of 22%
- Decent capital efficiency with ROE of 12.06% and ROCE of 13.62%
Concerns
- Free cash flow is negative at -₹214 Cr despite reported profits
- Extremely high valuation: P/E of 26.14, EV/EBITDA of 62.19, and price 95% above Graham Number
- Negligible dividend yield of 0.17% offers little income support
- Promoter holding of 27.73% is relatively low for an Indian flagship company
AI Analysis
Looking at MRF, I am reminded of a wonderful business at a far-from-wonderful price. The company has built a genuine moat in Indian tyres through brand recall, distribution, and customer trust. The balance sheet is conservative: debt-to-equity is just 0.19, and a Piotroski score of 8/9 indicates sound financial health. Returns are respectable though not spectacular—ROE is 12.06% and ROCE is 13.62%. Profit growth of 22% and a 5-year revenue CAGR of 11.74% show steady compounding. But I cannot ignore free cash flow of -₹214 Cr, which tells me earnings quality needs scrutiny despite the strong reported profit. Now valuation: at ₹1,34,615, the stock trades at 26.14 times earnings, 3.09 times book value, and an EV/EBITDA of 62.19. The Graham Number—a conservative anchor—is ₹72,166, so the current market price leaves a negative margin of safety of 95.36%. Even for a high-quality business, paying that much leaves little room for error. The dividend yield is negligible at 0.17%, so returns must come entirely from future growth and multiple expansion. That is not the sort of bet I prefer. MRF is a stalwart, but stalwarts deserve reasonable prices. I would wait for a price that offers a margin of safety, or for cash conversion to improve meaningfully, before deploying capital.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer