MRF Q1 FY27 Results (NSE: MRF)
Signal: Margin pressure
The read
The Q1FY27 inflection is negative after the 500bps OPM expansion in Q3FY26 and 100bps expansion in Q4FY26: consolidated revenue grew 9.64% YoY, but material costs rose 26.63%, gross margin compressed 156bps to 33.46%, operating margin fell 218bps to 11.77%, and PAT declined 1.29% to ₹495.35 crore.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹8,415.5 Cr | +9.64% | +4.61% |
| Net profit | ₹495.35 Cr | -1.29% | |
| EPS | ₹1,167.97 | -1.29% | |
| EBIT margin | 11.77% |
P&L walk
Revenue increased to ₹8,415.50 crore, up 9.64% YoY, but gross margin contracted 156bps to 33.46% as material costs rose to 69.58% of revenue from 60.10%, pulling EBITDA margin down 218bps to 11.77% and PAT down 1.29% to ₹495.35 crore.
Segments
No reportable segment table was provided; the group reported a single primary rubber-products segment, while subsidiaries contributed ₹118.95 crore of revenue and ₹19.77 crore of net profit.
Key positives
- Consolidated revenue increased 9.64% YoY to ₹8,415.50 crore and 4.61% QoQ, sustaining double-digit-like sequential momentum from the ₹8,044.22 crore Q4FY26 base.
- Finance costs declined 10.24% YoY to ₹88.33 crore, while depreciation grew only 4.40% YoY to ₹447.67 crore.
- Subsidiaries contributed ₹19.77 crore of group net profit, helping consolidated PAT of ₹495.35 crore exceed standalone PAT of ₹474.37 crore by ₹20.98 crore.
- EPS declined 1.29% YoY to ₹1,167.97, tracking PAT without a dilution signal.
Key concerns
- Gross margin contracted 156bps YoY to 33.46% as raw-material cost rose to 69.58% of revenue from 60.10%; revenue grew 9.64% while material cost increased 26.63%, indicating cost absorption rather than full pass-through.
- Operating margin fell 218bps YoY to 11.77%, reversing the 500bps expansion in Q3FY26 and 100bps expansion in Q4FY26.
- Consolidated PAT declined 1.29% YoY to ₹495.35 crore despite other income rising 51.69% YoY to ₹195.06 crore, showing that non-operating income did not offset weaker operating profitability.
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