Description
presents financial analysis of MRF tyres. It also includes the competitor analysis of MRF tyres as well as financial analysis
MRF Tyres
Click to edit Master subtitle style
1/28/13
Flow of presentation
1/28/13
INTRODUCTION
• • •
Founded in 1946 by Mr.K.M.Mammen Mappilai Madras Rubber Factory, later changed to Manorama Rubber Factory India's largest tyre manufacturing company & one of the 12 largest worldwide Enjoys the highest brand preference for superior quality, appearance and wearability A distribution network of over 5000 outlets in India Exports to more than 75 countries First India tyre company to achieve Rupees 100 Billion turnover Market leader in all tyre segments since last 25 years
•
• • • •
1/28/13
Products
1/28/13
Subsidiaries-JVs
Sr. No. 1. 2. 3. 4. 5. Company MRF Corp. Ltd. MRF International Ltd. MRF (Lanka) Pvt. Ltd. Funskool Malayala Manorama Type Subsidiary Subsidiary Subsidiary JV with Hasbro inc, USA Sister Concern Products Speciality Coatings International operations Sri Lanka Operations Toys Newspaper
1/28/13
Mergers & acquisitions
Followed organic growth till date in India Looking for overseas acquisitions of tyre plants and rubber plantations as part of its global expansion plan China & SouthEast Asia top priorities for acquisitions of mfg. plant & rubber plantations resp.
• •
•
1/28/13
Indian tyre industry
• •
CAGR of 10.8% in last decade The turnover of Rs. 30,000 crore for the period 2010-11, exports accounted for 12% Ten top companies produce 95% of the total production Increasing rubber prices Increased imports from China
•
Concerns• •
1/28/13
Indian tyre industry
1/28/13
Indian tyre industry
1/28/13
MRF-Market Performance
1/28/13
MRF – Market Performance
1/28/13
Subsidiaries Analysis
1/28/13
Financials
1/28/13
Financials (contd.)
1/28/13
Financials (contd.)
1/28/13
Financials (contd.)
Segment-wise growth –
Segment Total Sales HCV Motorcycle & Scooter Passenger Car Tractor Front & Rear Speciality Coatings Conveyor Belts Exports
Growth(in 2011-12) 32 % 11 % 14% & 24% 5% 8% & 21% Div. To subsdry from April’11 14% 23%
1/28/13
Impact of Recession
ICRA report says Tyre Industry in India grows annually at 5.3%
1/28/13
Effect on MRF
1/28/13
Costs
Costs Raw Material Salaries, Wages Power, Fuel Advertisement Selling and Admin Commission & Discount Freight & Transport Total Expenditure 2010-11 (Rs Crore) 7107.07 446.75 436.91 101.95 578.18 144.54 218.1 9279.06 2009-10 (Rs Crore) 5015.31 378.17 392.24 85.23 535.89 170.04 176.82 6947.19 % Change 41.7 18.1 11.4 19.6 7.9 -15.0 23.3 33.6
1/28/13
Competitor Analysis
Parameter Sales Raw Material Salaries, Wages Power, Fuel Advertisement Selling and Admin Commission & Discount Freight & Transport Total Expenditure MRF Tyres 10637.03 7107.07 446.75 436.91 101.95 578.18 144.54 218.1 9279.06 % of Sales 100 66.8 4.2 4.1 1.0 5.4 1.4 2.1 87.2 Apollo Tyres 8,935.35 6,284.95 365.66 239.02 28.7 411.29 13.1 163.8 7,447.64
1/28/13
% of Sales 100 70.3 4.1 2.7 0.3 4.6 0.1 1.8 83.4
Competitor Analysis
Parameter Gross Profit Margin Operating Profit Margin Net Profit Margin D/E ratio Inventory Turnover ratio EPS Net Worth MRF Tyres 15.5 8.08 6.15* 0.66 7.35 1460.50 Rs.2,297.77 Cr Apollo Tyres 15.72 8.75 2.22 1.05 8.46 3.6 Rs. 2047.60 Cr
* Excess Depreciation Reversal due to switching from WDV to SLM
1/28/13
MRF Dealer Margins
Category 2- Wheeler Passenger & Commercial vehicles Trucks Tractors Margins 8% 7% 1% 2%
1/28/13
Highlights of Management Discussion
LOW COST IMPORTS Duty concessions to importers led to the import of cheap and unsuited tyres Duty concessions should be extended to the imports of raw materials by the tyre manufacturers
•
•
1/28/13
Highlights of Management Discussion (contd.)
INFLATIONARY PRESSURE
• • •
Industry is raw material sensitive Affected by costs like natural rubber Increase in fuel price
1/28/13
Highlights of Management Discussion (contd.)
INABILITY TO PASS ON PRICE RISE TO OEM’S
•
•
In OEM car manufacturer has more bargaining power So profit margins are hampered INTENSE COMPETITION IN INTERNATIONAL MARKET Intense competition from China and South East Asian countries in tyre exports
1/28/13
•
Highlights of Management Discussion (contd.)
• • •
•
OUTLOOK Projected CAGR of 8.9% in the next 5 years New uncharted territories as export market Growth on automobile sector & its cumulative effect on tyre industry Rubber prices are easing
1/28/13
References
• • •
MRF Annual Reports 2009-10, 2010-11 Moneycontrol.com Mrftyres.com
1/28/13
Thank You!
1/28/13
doc_799915157.pptx
presents financial analysis of MRF tyres. It also includes the competitor analysis of MRF tyres as well as financial analysis
MRF Tyres
Click to edit Master subtitle style
1/28/13
Flow of presentation
1/28/13
INTRODUCTION
• • •
Founded in 1946 by Mr.K.M.Mammen Mappilai Madras Rubber Factory, later changed to Manorama Rubber Factory India's largest tyre manufacturing company & one of the 12 largest worldwide Enjoys the highest brand preference for superior quality, appearance and wearability A distribution network of over 5000 outlets in India Exports to more than 75 countries First India tyre company to achieve Rupees 100 Billion turnover Market leader in all tyre segments since last 25 years
•
• • • •
1/28/13
Products
1/28/13
Subsidiaries-JVs
Sr. No. 1. 2. 3. 4. 5. Company MRF Corp. Ltd. MRF International Ltd. MRF (Lanka) Pvt. Ltd. Funskool Malayala Manorama Type Subsidiary Subsidiary Subsidiary JV with Hasbro inc, USA Sister Concern Products Speciality Coatings International operations Sri Lanka Operations Toys Newspaper
1/28/13
Mergers & acquisitions
Followed organic growth till date in India Looking for overseas acquisitions of tyre plants and rubber plantations as part of its global expansion plan China & SouthEast Asia top priorities for acquisitions of mfg. plant & rubber plantations resp.
• •
•
1/28/13
Indian tyre industry
• •
CAGR of 10.8% in last decade The turnover of Rs. 30,000 crore for the period 2010-11, exports accounted for 12% Ten top companies produce 95% of the total production Increasing rubber prices Increased imports from China
•
Concerns• •
1/28/13
Indian tyre industry
1/28/13
Indian tyre industry
1/28/13
MRF-Market Performance
1/28/13
MRF – Market Performance
1/28/13
Subsidiaries Analysis
1/28/13
Financials
1/28/13
Financials (contd.)
1/28/13
Financials (contd.)
1/28/13
Financials (contd.)
Segment-wise growth –
Segment Total Sales HCV Motorcycle & Scooter Passenger Car Tractor Front & Rear Speciality Coatings Conveyor Belts Exports
Growth(in 2011-12) 32 % 11 % 14% & 24% 5% 8% & 21% Div. To subsdry from April’11 14% 23%
1/28/13
Impact of Recession
ICRA report says Tyre Industry in India grows annually at 5.3%
1/28/13
Effect on MRF
1/28/13
Costs
Costs Raw Material Salaries, Wages Power, Fuel Advertisement Selling and Admin Commission & Discount Freight & Transport Total Expenditure 2010-11 (Rs Crore) 7107.07 446.75 436.91 101.95 578.18 144.54 218.1 9279.06 2009-10 (Rs Crore) 5015.31 378.17 392.24 85.23 535.89 170.04 176.82 6947.19 % Change 41.7 18.1 11.4 19.6 7.9 -15.0 23.3 33.6
1/28/13
Competitor Analysis
Parameter Sales Raw Material Salaries, Wages Power, Fuel Advertisement Selling and Admin Commission & Discount Freight & Transport Total Expenditure MRF Tyres 10637.03 7107.07 446.75 436.91 101.95 578.18 144.54 218.1 9279.06 % of Sales 100 66.8 4.2 4.1 1.0 5.4 1.4 2.1 87.2 Apollo Tyres 8,935.35 6,284.95 365.66 239.02 28.7 411.29 13.1 163.8 7,447.64
1/28/13
% of Sales 100 70.3 4.1 2.7 0.3 4.6 0.1 1.8 83.4
Competitor Analysis
Parameter Gross Profit Margin Operating Profit Margin Net Profit Margin D/E ratio Inventory Turnover ratio EPS Net Worth MRF Tyres 15.5 8.08 6.15* 0.66 7.35 1460.50 Rs.2,297.77 Cr Apollo Tyres 15.72 8.75 2.22 1.05 8.46 3.6 Rs. 2047.60 Cr
* Excess Depreciation Reversal due to switching from WDV to SLM
1/28/13
MRF Dealer Margins
Category 2- Wheeler Passenger & Commercial vehicles Trucks Tractors Margins 8% 7% 1% 2%
1/28/13
Highlights of Management Discussion
LOW COST IMPORTS Duty concessions to importers led to the import of cheap and unsuited tyres Duty concessions should be extended to the imports of raw materials by the tyre manufacturers
•
•
1/28/13
Highlights of Management Discussion (contd.)
INFLATIONARY PRESSURE
• • •
Industry is raw material sensitive Affected by costs like natural rubber Increase in fuel price
1/28/13
Highlights of Management Discussion (contd.)
INABILITY TO PASS ON PRICE RISE TO OEM’S
•
•
In OEM car manufacturer has more bargaining power So profit margins are hampered INTENSE COMPETITION IN INTERNATIONAL MARKET Intense competition from China and South East Asian countries in tyre exports
1/28/13
•
Highlights of Management Discussion (contd.)
• • •
•
OUTLOOK Projected CAGR of 8.9% in the next 5 years New uncharted territories as export market Growth on automobile sector & its cumulative effect on tyre industry Rubber prices are easing
1/28/13
References
• • •
MRF Annual Reports 2009-10, 2010-11 Moneycontrol.com Mrftyres.com
1/28/13
Thank You!
1/28/13
doc_799915157.pptx