MRF has started production at its new plant in Tiruchi (Tamil Nadu).

The company has invested around Rs 900 crore on the 200-acre plant, which will manufacture a full range of tyres, including truck tyres and radials. It will cater to both domestic and export requirements.

The plant has just begun rolling out tyres, for both commercial and non-commercial vehicles. “Ramp-up is happening. We expect it to reach full capacity in six months,” said Mr Koshy Varghese, Executive Vice-President – Marketing.

This facility was proposed as its existing six manufacturing units were operating at full capacity. MRF's other manufacturing units are in Arakonam, Tiruvottiyur (Tamil Nadu), Medak (Andhra Pradesh), Goa, Kottayam (Kerala) and Puducherry.

The company has posted a 25 per cent increase (year-on-year) in net sales at Rs 3,264 crore. Net profit rose 68 per cent to Rs 150 crore.

Mr Varghese says the driver of growth this quarter has been the replacement market. According to an analyst, the after-market sales give pricing power to companies, enabling them to post high margins.

Rubber prices have also cooled off substantially, from the peak of Rs 240 a kg to Rs 190 now. This has had a positive impact on operating margins which have grown from 8.4 per cent a year ago to 10 per cent now.

MRF's share price was down 1.77 per cent to close at Rs 11,234.20 on the BSE on Thursday.

Business Line