MRF – Tyres with muscle to breakout its 6-month high

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“Perfect journey begins with perfectly aligned wheels” – MRF Tyres.


The MRF journey has been a remarkable one. It started as a rubber balloon factory with a minuscule funding of Rs.14,000 donkey’s years back in the 1940s. Today, it stands firm as a multibillion legacy that manufactures quality tyres used across geographies along with a significant presence in paints & coats, motor sports, toys and cricket training. MRF produces the largest range of tyres in India and exports to unnumbered countries globally.

The Grandiose Breakout
MRF Tyres share price witnessed a clear breakout above its 6-month high of Rs.39,000. The breakout happened yesterday. In the last 2 days, its share price has zoomed from Rs.39,000 to Rs.40,300.
In a nutshell, a breakout is a price movement of a security via a recognized level of resistance, that is usually accompanied by heavy volumes and high amount of volatility. Traders buy the underlying asset as soon as the price either breaks above a level of resistance or it breaks below a level of support.

Battle with the peers
When compared to its peers, MRF has a story that should be told and heard. After Brexit, the market has shown an up movement with Nifty increasing by 13 per cent from 7927 to 8963. However, MRF along with its peers Apollo Tyres and Ceat have outperformed the market. After Brexit, MRF share price has witnessed a growth of 33 per cent while Apollo Tyres and Ceat shares have significantly grown by 48 per cent and 39.2 per cent, respectively.

Twist in the tale
As far as the EPS or earning per share of the above three stocks is concerned, there stands a twist in the tale. Where Ceat is showing a negative EPS growth of 1.3 per cent, MRF is leading with positive EPS growth of 30.3 per cent followed by Apollo Tyres witnessing 25.9 per cent growth. EPS has turned tables for MRF shares and made it the stock with the highest scope of growth in coming future as compared to its peers.      

  
 Flashback on Q1
MRF’s net profit soared by 2.37 per cent to Rs.490.93 cr on 1.01 per cent hike in total income to Rs.3555.53 cr in Q1 June 2016 as compared to Q1 June 2015. The Q1 result was declared at the fag end of aftermarket hours on 11th August 2016. The stock had risen 0.56 per cent to settle at Rs.36,689.30 on that particular day. It was seen to be volatile throughout the day.

MRF share price performance:
The stock had hit a 52-week high of Rs.44,644 on 20th August 2015 it had touched a 52-week low of Rs.30,464.25 on 24th June 2016.
The life time high of MRF share price stands at Rs.46399.00 (05-Aug-15), on the other hand, the life time low of the stock stands at Rs.401.00 (17-Oct-01).

Achievements just refuse to halt
In 2014, MRF won the JD Power Award for the 11th time. The award is widely considered by peers to be the Oscar of the automobile industry.
The company has won numerous awards and accolades, however to name a few:
  • AIRIA – All India Rubber Industries Association’s award for the ‘Highest Export Awards in the Auto Tyre Sector’.
  • ‘Top Export Award’ from CAPEXIL – Chemicals & Allied Products Export Promotion Council for 2009-10.
  • In the year 2014, MRF was ranked 48th among India’s most reliable brands as per the Brand Trust Report, a study which is conducted by Trust Research Advisory.

Conclusion:
According to Dynamic Levels Researchers, MRF Tyres is currently the best stock in the tyre industry for investment and the immediate target for MRF would be Rs.41424. The scrip has impressive financials and strong fundamentals.

“Adding muscle to the nation’s security” – MRF Tyres.


Comments

  1. Dariya25 September 2020 at 02:55

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