An enterprise that started as a toy balloon maker in 1946 in South India quickly grew to become one of India's biggest and respected companies. Renowned for product superiority and innovation, MRF continues to be the leading tyre-maker in India<br />
Tyre Industry Structure in INDIA<br /><ul><li>Valued at approximately Rs.25,000 crore per annum.
With Rs.3000 crore estimated to be the value of exports.</li></ul> 39 tyre companies.<br /> 60 factories located all over India.<br /> 10 major tyre companies account for 88% of the<br /> tyre business in the country.<br />
About Indian Tyre Industry <br />Facts<br />Second largest two wheeler manufacturer in the world.<br />Largest tractor and three wheeler manufacturer in the world.<br />Fourth largest commercial vehicle market in the world.<br />Eleven largest passenger car market in the world.<br />Trends<br />> Growth of exports of 22.30% FY 2009-10<br /> > Commercial vehicles segment grew at 4.07%<br /> > Light commercial vehicles grew at 12.29%<br />Growth Potential<br />Can become world's third largest automobile market in 2030.<br />By 2016, Automotive sector can double its percentage contribution to GDP<br /> from current level of 5% (US $50billion) to 10% (US $180billion)<br />
SWOT analysis of Tyre Industry in India<br /> Weaknesses<br /><ul><li> Cost Pressure
Steady increase in radial tyres for MHCV, LCV.</li></li></ul><li>DIRECTOR’SREPORT<br /><ul><li>Landmark achievement of sales turnover of Rs 8000 crores
31% sales growth</li></ul> > Leveraged by growth in automobile sector<br /> > Low interest rates<br /><ul><li>Twice interim dividend of Rs 3/share in the month of Sept. and Dec . were declared by board of director.
Further board recommended final dividend of Rs 19/share and a special dividend of Rs 25/share on Paid-up-Equity share capital .
An amount of Rs 329.26 crores was recommended to be transferred to General Reserve after tax provision and proposed dividend.
Concern for uncertain rise of material price and price sensitive market.
8 – 10 % duty charges on finished tyres from other countries especially China.</li></li></ul><li>FinancialResults<br />High Sales Growth of 31 %<br />Growth due to:<br /><ul><li> Turnaround in Automobile market
Way Ahead…<br />The automobile industry has picked up really fast this year hence boosting tyre sales.<br />Chinese tyres have lower import duty(8-10%) thus are more in demand whereas raw material import duties(20%) are high thus having higher cost.<br />High reserve surplus to cover fluctuation in raw material cost(70 % of total cost). Natural Rubber prices increased from Rs.132 /kg to Rs 180 /kg.<br />MRF has invested heavily in R&D which in turn is providing higher returns .<br />MRF has also come up with a new factory in Andhra Pradesh which is highly automated and technologically advanced. <br />
Cont…<br />Market price of share very high. Rs 9439 per share in Sept 2010<br /> with 544616 shares traded on NSE.<br />Recommendations<br />Stock split up as per share market price is very high.<br />This will increase the equity base also.<br />