Why Is MRF’s Share Price So high?

There are a lot of factors that go into why a company’s stock price is what it is. Sometimes it can be based on the company’s current performance, and other times it might be based on future expectations. In the case of MRF Ltd., there are likely several reasons for its high stock price. Let’s take a closer look at some of them.

What is MRF Company?

MRF Ltd., formerly known as the Madras Rubber Factory Limited, is a company involved in the manufacturing and trading of natural rubber products. It operates in four segments: automotive tires, consumer tires, bike tires, and other products such as conveyor belts etc. The company was founded by K.A. Mathumal in 1946, and is headquartered in Chennai, India.

Why is MRF Share Price so High?

Because the firm has never split its stock to reduce share costs, the MRF stock price is expensive. The cost of one MRF stock is presently above Rs. 70,000 in India, making it one of the most costly equities to invest in.

Is Investing in MRF Good?

Yes, it is good to invest with MRF. The price of the stock may be high, but it is still good to buy investment if you are looking for long-term returns. The company has built a great portfolio by manufacturing quality products that have gained widespread popularity across India and in foreign markets as well. It has also managed to stay afloat despite intense competition from rivals in the rubber industry.

Reasons to Trust MRF Share

Price

The MRF share price is high because it has grown dramatically since its IPO, and the company’s earnings have also grown exponentially over the years. The downside to investing in the stock is that there are certain negatives associated with being heavily dependent on a single product. But if you have plans of making long-term investments, then this could be the right time to buy shares in MRF.

MRF Profitability

Even though MRF has a high price per share, it also has a high net earnings margin. This means that the company is making a lot of profit per share, even if it has a high price. The earnings have gone up by over 100% in the last five years, and this trend is likely to continue.

MRF Financials

Looking at the financials of MRF, you’ll see that it’s in great shape. It has a healthy balance sheet, and its return on equity is also higher than its cost of equity which means that it’s managing to generate returns for investors at the same time.

MRF Future Prospects

With the Indian economy showing signs of slow growth, now might not be the best time to invest in anything. But if you are thinking long-term, then investing in shares of MRF could be a great way to go. The company has grown by leaps and bounds since its IPO in 2007, and has been growing ever since.

Who Holds Most of MRF Shares?

MOWI Pvt Ltd is a hedge fund firm that owns almost half of the company. They currently have a large 12% stake in MRF, with the rest being split between the general public and some big investors.

Will MRF Touch 100000?

On February 10, 2021, the RFMRF stock price hit Rs 96,973, generating a lot of excitement that the share would rise to 1 Lacs. Given the stock’s excellent fundamentals, and given that inflation and the market are both increasing, it is highly probable that MRF will reach Rs 1 lakh in the near future.

Can I Buy 1 Share of MRF?

Yes. Even 1 MRF share is purchasable. However, you have to be very careful as the high cost and its various stakes can be critical to handle and avoid losses.

Conclusion

MRF has been able to sustain a high share price by maintaining a strong balance sheet and continuously generating cash flow. The company’s success in the stock market is largely due to its ability to generate more than enough revenue from operations, which have risen at an average of 11% per year over the last decade.