MRF shares below Rs 1,00,000 level? 2 brokers see steep fall ahead

Shares of MRF Ltd fell over 3 per cent in Friday’s trade, as at least two brokerages suggested ‘Sell’ calls on the stock, with targets as low as Rs 97,000 level. To be sure, MRF’s Q1 results were strong relative to peers, with lower employee cost offsetting raw material inflation, resulting in margin beat. MRF reported a revenue growth of about 12 per cent YoY in Q1 against 8 per cent for CEAT and 4 per cent for Apollo Tyres. But despite strong revenue growth, MRF’s profit declined 3 per cent YoY due to commodity inflation and higher depreciation.

Shares of MRF fell 3.4 per cent to hit a low of Rs 1,35,501 on BSE. It was later quoting at Rs 1,37,106.10 level. Share price targets for MRF suggest up to 29 per cent downside over this price.

MOFSL said it raised its FY25 EPS estimate by 4 per cent and FY26 estimate by 9 per cent to factor in better-than-expected revenue growth and cost efficiencies.

MRF stock trades at 29.5 times FY25 EPS, which is higher than Apollo Tyres’ 19 times and CEAT’s 17.2 times. This, MOFSL said, does not align with its weakening competitive position. It maintained ‘Sell’ on the stock with a target price of Rs 1,08,000, based on 19 times June 2026 EPS.

Kotak Institutional Equities said MRF Q1 Ebitda was 7 per cent above its estimates due to better-than-expected revenue print and cost-control measures. It expects demand trends to remain steady. Market share gain augurs well for MRF, it said.

“However, current uptick in the RM basket will continue to weigh on margins. SELL stays with a revised FV of Rs 97,000 against Rs 87,000 earlier. The stock is currently trading at 28 times FY2026E consolidated EPS, which we believe is expensive,” Kotak said.

Kotak said a relatively aggressive price strategy adopted by MRF will aid the company to continue to gain market share; however, it will weigh on margins in the near term given sharp uptick in NR prices.