As I had posted earlier MRF has lots of hidden assets and strengths but even after recent runup to 7420 there may be steam left because of hiigher targetted sales growth.Run by a classy managemement this is a gem.

Edited by Ajith - 30/Oct/2007 at 10:30pm

An indirect play on the auto boom at decent valuations

MRF’s net profit has gone up 11 times in last 10 years i.e. a CAGR of 28%

The stock has been up only 5 times during that period a CAGR of 17%

What wonders a well managed company can do even in a space which is cyclical and commodity linked

The caveat here is that the rubber prices are quoting at historic highs

Though the govt has decreased the import duty on rubber, coming 2 quarters are going to be bad

 

But the stocks makes sense from 3-4 years perspective

 

Some pricing power coming to tyre manufacturers

 

Industry growth on a different trajectory

Please see page 9 of this report

http://xa.yimg.com/kq/groups/15722533/511837053/name/Apollo+Tyres+-+Credit+Suisse.pdf

 

 

Here is the comparison of the top 3 Indian manufacturers

Look at the ROE of MRF !!!!!!

The ROE is going to collapse before taking off again

 

	P/E	EV/EBITDA	ROE
MRF	8.8	4.0	21%
Apollo	6.8	5.7	25%
JK Tyres	5.4	4.4	15%

 

All figures calculated using current price, 31/03/2010 balance sheet and last four quarters income statement

I have taken the total debt instead of net debt for calculation of EV

Apollo’s EBITDA is that of last financial year

Apollo should also be closely watched it has new capacity which would add

On negative note Apollo is erratic in terms of numbers

 

 MRF financial

(Rs. in Crore)	2010	2009	2008	2007	2006	2005	2004	2003	2002	2001
Sales	8080.45	6141.94	5715.52	5036.75	4233.66	3437.13	2989.43	2541.97	2195.62	2090.50
Other Income	41.97	34.40	40.83	24.17	27.07	44.96	58.54	65.71	45.08	33.95
Total Income	8122.42	6176.34	5756.35	5060.92	4260.73	3482.09	3047.97	2607.68	2240.70	2124.45
Profit Before Taxation	534.66	398.48	211.39	260.96	99.81	55.34	42.90	167.75	112.50	48.74
Provision for Taxation	180.68	145.45	66.83	89.18	19.90	15.03	14.10	50.37	34.04	17.00
Profit after Taxation	353.98	253.03	144.56	171.78	79.91	40.31	28.80	117.38	78.46	31.74
Share Capital	4.24	4.24	4.24	4.24	4.24	4.24	4.24	4.24	4.24	4.24
Reserves	1686.44	1357.18	1116.55	981.91	820.05	749.81	719.17	699.96	592.15	526.51
Net Worth	1690.68	1361.42	1120.79	986.15	824.29	754.05	723.41	704.20	596.39	530.75
Fixed Assets Gross	3865.62	3020.57	2866.24	2289.77	1955.99	1787.85	1534.47	1348.80	1224.17	1155.15

 

Edited by excel_monkey - 26/Dec/2010 at 4:37am