Analysts Have Made A Financial Statement On MRF Limited's (NSE:MRF) Second-Quarter Report

As you might know, MRF Limited (NSE:MRF) recently reported its second-quarter numbers. It was a workmanlike result, with revenues of ₹69b coming in 2.2% ahead of expectations, and statutory earnings per share of ₹4,907, in line with analyst appraisals. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for MRF

Following last week's earnings report, MRF's seven analysts are forecasting 2025 revenues to be ₹267.3b, approximately in line with the last 12 months. Statutory earnings per share are forecast to reduce 2.4% to ₹4,484 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹268.7b and earnings per share (EPS) of ₹4,382 in 2025. So the consensus seems to have become somewhat more optimistic on MRF's earnings potential following these results.

The consensus price target was unchanged at ₹114,507, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values MRF at ₹141,052 per share, while the most bearish prices it at ₹92,500. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that MRF's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.1% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than MRF.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around MRF's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹114,507, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple MRF analysts - going out to 2027, and you can see them free on our platform here.

We also provide an overview of the MRF Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.