Earnings Miss: MRF Limited Missed EPS By 6.5% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that MRF Limited (NSE:MRF) filed its full-year result this time last week. The early response was not positive, with shares down 3.3% to ₹126,476 in the past week. Revenues of ₹252b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at ₹4,907, missing estimates by 6.5%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for MRF

Following the latest results, MRF's six analysts are now forecasting revenues of ₹272.3b in 2025. This would be a meaningful 8.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to shrink 4.3% to ₹4,698 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹267.2b and earnings per share (EPS) of ₹5,192 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The average price target fell 7.1% to ₹108,034, with reduced earnings forecasts clearly tied to a lower valuation estimate. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic MRF analyst has a price target of ₹141,082 per share, while the most pessimistic values it at ₹87,000. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. 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 8.2% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. Factoring in the forecast slowdown in growth, it seems obvious that MRF is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of MRF's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple MRF analysts - going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.