Thanks Pranav for the thread!
Few Questions based on cursory look -
- Based on screener numbers, there is no significant top line growth from Sept 2013 on QoQ basis but operating margin has gone up from 14% to 24%. As you mentioned there has been softening raw material prices and that can lead to two things - flat revenue and increased margins. So my questions are -
- Is there volume increase?
- Do they have pricing power? (I’m inclined to say no based on Chinese competition you mentioned)
- Margin increase is purely because of raw materials or has there been productivity improvement as well?
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You mentioned that tyre market in India is worth 50k Cr and MRF approx has sales of ~13k Cr. Ignoring other segments, one can say that they have 25% market share. Can they grow market share?
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A quick search shows that - only MRF and Balkrishna Industries have been able to scale up margins in last 2-3 years but Apollo and JK Tyres have not been able to. So one can “claim” that MRF might be the most “efficient”. What brings in this efficiency?
Regards,
Rupesh