How MRF Makes Money, and Why One Share Costs Over ₹1 Lakh
Updated 10 November 2026 with Q2 FY27 results. MRF is India's biggest tyre maker, with roughly a third of domestic tyre units sold, and its share price is famous on its own: about ₹1.25 lakh for a single share. Both facts come from the same boring, durable machine: replacement tyres.
The short answer
MRF makes money by selling tyres, mostly replacement tyres sold through 5,000+ dealers (about 69% of channel sales), plus carmakers, defence and exports. In FY26 it earned ₹2,426 crore on ₹31,149 crore revenue. Its share costs ₹1.25 lakh because it has only 42.4 lakh shares and has never split them.
MRF key numbers
Metric | Value | Period | Source |
Revenue from operations (consolidated) | ₹31,149 crore | FY26 | MRF Annual Report |
Net profit (consolidated) | ₹2,426 crore (+30%) | FY26 vs FY25 | MRF press release |
Replacement share of channel sales | ~69.1% | FY26 | CareEdge |
OEM and defence share | ~23.3% | FY26 | CareEdge |
Operating (PBILDT) margin | 15.78% → 13.77% | FY26 → Q1 FY27 | CareEdge |
Q1 FY27 revenue / profit | ₹8,416 Cr (+9.6%) / ₹495 Cr (−1.3%) | Apr–Jun 2026 | ETAuto |
Q2 FY27 revenue / profit | ₹8,660 Cr (+17.4%) / ₹387 Cr (−26.6%) | Jul–Sep 2026 | MRF results filing |
Total dividend | ₹235 per share | FY26 | MRF press release |
Interim dividend | ₹3 per share | FY27 (record date 17 Nov 2026) | MRF results filing |
Shares outstanding | 42,41,143 | 31 Mar 2026 | MRF Annual Report |
Sources: MRF Annual Report 2025-26, MRF FY26 press release, CareEdge rating rationale, ETAuto Q1 FY27 report, MRF Q2 FY27 results filing.
Where does MRF's revenue come from?
Start with who buys the tyres. According to CareEdge Ratings' rationale on MRF, the replacement market contributed about 69.1% of channel sales, OEMs and defence about 23.3%, and exports about 8%. CareEdge also says MRF accounts for roughly 31.9% of estimated tyre units sold by the domestic industry and runs a network of more than 5,000 active dealers.
Replacement is the better business. A carmaker buys tyres in bulk and negotiates hard; a truck owner whose tyre wears out after a season buys at a dealer, often sticking with the brand he trusts. Every vehicle already on the road is a future customer, so replacement demand keeps coming even when new-vehicle sales slow.
Replacement (dealers): trucks, buses, cars and two-wheelers needing new tyres. Higher prices, steady volumes, brand-driven.
OEM and defence: tyres fitted on new vehicles. Lower margins, but they put MRF on the vehicle and seed later replacement purchases.
Exports: ₹2,324 crore in FY26 per the annual report, up slightly from ₹2,307 crore. CareEdge names the Philippines, Bangladesh, Nepal and the UAE as the main export markets.
Other: tubes, flaps, tread rubber, paints (MRF Vapocure), sports goods and a small toy business (Funskool) round out the group.
How did the numbers move over ten years?
The annual report's ten-year summary shows revenue roughly doubling from FY17 to FY26 while profit swung sharply, from ₹1,486 crore in FY17 down to ₹669 crore in FY22, then back up to ₹2,426 crore in FY26. Revenue tells you about demand; profit tells you about rubber.
Why does rubber decide MRF's profit?
Raw materials are the biggest cost by far. Standalone materials cost was about ₹18,741 crore in FY26, roughly 61% of revenue (MRF Annual Report). CareEdge notes that imported materials were 33.71% of raw-material consumption, so the rupee matters too. When natural rubber and crude-linked inputs (synthetic rubber, carbon black) get expensive, MRF has to raise prices, and that takes a quarter or two.
That is exactly what happened in Q1 FY27. Revenue rose 9.6% to ₹8,416 crore but profit slipped 1.3% to ₹495 crore, which ETAuto and BusinessLine attribute to higher input costs. CareEdge says the operating margin fell to 13.77% from 15.78% in FY26.
Q2 FY27 was the same story, only worse. Revenue rose 17.4% to ₹8,660 crore, but profit fell 26.6% to ₹387 crore from ₹527 crore a year ago, according to MRF's results filing of 10 November. Why? The materials bill. Cost of materials consumed jumped 43% to ₹6,553 crore, and part of that went into stock (inventories rose from ₹5,417 crore in March to ₹7,163 crore in September). Even after adjusting for that stock, materials ate about 67 paise of every rupee of sales, against 63 paise a year earlier (Page 21 calculation from the filing).
Why does one MRF share cost ₹1.25 lakh?
Because the profit is shared among very few shares. MRF has only 42,41,143 equity shares of ₹10 each, and the ten-year summary shows share capital stuck at ₹4.24 crore throughout: no split, no bonus. Compare that with large companies that have hundreds of crores of shares.
Page 21 analysis: MRF on a per-share basis
Per-share metric | Calculation | Approx. value |
Earnings per share (FY26) | ₹2,426 Cr ÷ 42.41 lakh shares | ₹5,720 |
Dividend per share (FY26) | ₹3 + ₹3 interim + ₹229 final | ₹235 |
Dividend payout | ₹235 ÷ ₹5,720 | ~4.1% |
Price-to-earnings | ₹1,25,105 (9 Nov close) ÷ ₹5,720 | ~21.9x |
Price-to-book | Price ÷ ~₹49,456 book value per share | ~2.5x |
Page 21 calculation from MRF's FY26 consolidated figures and the 9 November 2026 closing price. The point: MRF is not "expensive" because of the ₹1.25 lakh sticker. A P/E near 22 is in the normal range for a large Indian manufacturer. The sticker is a share-count artefact, and it does keep the register small: the annual report lists about 58,110 shareholders, with 97% holding 100 shares or fewer.
Why not split? MRF has not published a formal reason that we could find. A split would not change the company's value; it would only make each share cheaper. Many investors read the decision as a preference for a smaller, long-term shareholder base, but that is interpretation, not company policy.
Test yourself
What happens next
MRF's board met on 10 November 2026 and approved the Q2 FY27 results. It also declared an interim dividend of ₹3 per share, with 17 November as the record date and payment on or after 1 December. Now watch Q3: do tyre prices catch up with rubber costs, and how fast does the extra ₹1,746 crore of inventory get sold?
Related explainers
More from our series on how companies make money:
FAQ
How does MRF make most of its money?
By selling tyres. CareEdge says replacement sales through 5,000+ dealers made up about 69.1% of channel sales, OEM and defence about 23.3%, and exports about 8%. FY26 consolidated revenue from operations was ₹31,149 crore.
Why is an MRF share so expensive?
MRF has only 42,41,143 shares. FY26 profit of ₹2,426 crore works out to about ₹5,720 per share, so even a P/E near 22 puts the price around ₹1.25 lakh. Share capital has stayed at ₹4.24 crore across the ten-year summary in its annual report.
Has MRF ever split its shares?
MRF's ten-year financial summary shows share capital unchanged at ₹4.24 crore, meaning no split or bonus in that period. The company has not issued an official explanation that we could find.
What hurts MRF's profits?
Raw materials. Materials cost was about 61% of standalone FY26 revenue, and CareEdge says the operating margin fell to 13.77% in Q1 FY27 from 15.78% in FY26 as natural rubber prices rose. In Q2 FY27, profit fell 26.6% even though revenue grew 17.4%.
What were MRF's Q2 FY27 results?
MRF reported consolidated revenue of ₹8,660 crore for July-September 2026, up 17.4% from a year earlier, and net profit of ₹387 crore, down 26.6%. The board declared an interim dividend of ₹3 per share, with 17 November 2026 as the record date.
Sources
Related on Page 21
This explainer is for information only and is not investment advice.
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