MRF’s Q1FY27 margin slips as raw-material costs rise despite revenue growth

MRF’s standalone revenue rose 10% year-on-year to ₹8,291.56 crore, but EBITDA fell 8% and adjusted PAT declined 2% as gross margin contracted 570 bps sequentially. With its raw-material basket expected to rise 8-10% in Q2FY27, further pricing action may be needed amid slower growth than key tyre peers.

— Source published Thu, 20 Aug, 2026, 15:00 IST · First seen Thu, 20 Aug, 2026, 15:04 IST · Source Mint · Markets

What happened

MRF reported subdued Q1FY27 earnings as input-cost inflation cut margins despite price hikes. Rising natural rubber and crude-derivative costs, slower sales

Key facts

  • Standalone revenue rose 10% YoY to ₹8,291.56 crore
  • Adjusted PAT fell 2% to ₹474.37 crore
  • Other income rose 53% to ₹191.48 crore
  • EBITDA declined 8% YoY to ₹948.6 crore
  • Gross margin fell 570 bps sequentially to 32.7%
  • Raw-material basket may rise 8-10% in Q2FY27
  • Ceat revenue rose 18% and Apollo Tyres revenue rose 16% in Q1FY27
  • MRF stock is down about 13% in 2026
  • MRF trades at 20x estimated FY28 earnings

Why this matters

MRF’s weaker profitability versus key tyre peers may heighten the strategic value of supply-chain partnerships, raw-material hedging and premium-product investments that improve pricing power.

What to watch

  • Quarterly movement in natural rubber, synthetic rubber, carbon black and crude prices.
  • Magnitude and timing of MRF and peer tyre-price increases in Q2FY27.
  • Sequential gross-margin and EBITDA-margin performance in Q2FY27 results.
  • Replacement-market volumes versus OEM tyre demand and vehicle-production trends.
  • Dealer inventory levels, discounting intensity and evidence of demand downtrading.
  • Relative revenue growth and margin trends at Apollo Tyres, CEAT, JK Tyre and Balkrishna Industries.
  • Implement phased price hikes in replacement tyres, prioritising premium passenger, SUV and truck-bus segments.
  • Use product mix, export realisations and higher-value radial tyres to cushion gross-margin pressure.
  • Tighten promotional spending, freight costs and plant utilisation to protect EBITDA where pricing pass-through is delayed.
  • Monitor dealer inventory before additional price actions to avoid channel destocking.
  • Seek procurement hedges and supplier-contract adjustments for natural rubber and crude-linked materials.