MRF margin improves YoY but slips 1.16 points sequentially
Revenue grew 13.70% YoY, but costs outpaced sales sequentially; the stock's initial decline was modest versus its past results-day moves.
Filed 07 May 2026, 12:43 IST · MRF Ltd (MRF)
Key takeaways
- Consolidated revenue rose 13.70% YoY to Rs 8,044.22 cr, while operating margin expanded 0.97 percentage points to 16.22%.
- Sequentially, revenue was nearly flat at -0.08% while expenses grew 1.33%, narrowing operating margin by 1.16 percentage points from Q3FY26.
- Net profit rose 37.13% YoY to Rs 702.25 cr, although other income contributed 16.46% of pre-tax profit and the tax rate increased 1.98 percentage points.
Price around the results
Revenue growth held up against last year
Consolidated revenue increased 13.70% YoY, with expenses growing 12.40%, allowing operating profit to rise 20.96%. The 16.22% operating margin was 1.41 percentage points above the 14.81% median for 93 Consumer Discretionary peers that had reported the quarter. Sequential momentum was weaker: revenue fell 0.08% from Q3FY26.
Sequential cost growth reversed part of the margin gain
Expenses rose 1.33% sequentially despite almost flat revenue, so operating margin narrowed 1.16 percentage points from 17.38% in Q3FY26. Year on year, the opposite relationship held, with revenue growth exceeding expense growth and lifting margin by 0.97 percentage points. Interest expense fell 11.85% YoY, while depreciation increased 2.07%.
Other income supported pre-tax profit quality
Other income rose 35.68% YoY and made up 16.46% of pre-tax profit, so a meaningful part of earnings came outside operations. The tax rate increased 1.98 percentage points YoY to 24.47%, which did not flatter net profit growth. The margin trend remains mixed: Q4FY26 improved from Q4FY25, but declined from the Q3FY26 peak after rising through the prior two quarters.
The first market reaction was milder than MRF's usual results move
MRF fell 0.28% on the results day and was down 2.98% after five sessions, with trading volume at 3.18 times the reference level. Across the last eight results, the stock declined after six and rose after two, with a median absolute move of 1.62%. The immediate move was therefore smaller than its typical post-results change, though the five-session decline was more pronounced.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹8,044 cr | ₹8,050 cr | -0.08% | +13.70% |
| Other income | ₹153 cr | ₹47 cr | +222.96% | +35.68% |
| Expenses | ₹6,739 cr | ₹6,651 cr | +1.33% | +12.40% |
| Operating profit | ₹1,305 cr | ₹1,399 cr | -6.75% | +20.96% |
| Operating margin (%) | 16.22% | 17.38% | — | — |
| Interest | ₹86 cr | ₹91 cr | -5.37% | -11.85% |
| Depreciation | ₹442 cr | ₹438 cr | +0.84% | +2.07% |
| Profit before tax | ₹930 cr | ₹917 cr | +1.35% | +40.71% |
| Tax | ₹227 cr | ₹226 cr | +0.86% | +53.06% |
| Net profit | ₹702 cr | ₹692 cr | +1.51% | +37.13% |
| EPS (₹) | ₹1655.80 | ₹1631.23 | +1.51% | +37.13% |
Operating margin of 16.22% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.28% | -0.27% |
| Next session | +0.07% | — |
| 5 sessions | -2.98% | -0.34% |
| 15 sessions | -5.31% | — |
| 30 sessions | -1.30% | — |
Volume on the results session was 3.18× its 20-day average.
What to watch
- Whether operating margin holds above 16.22% after the sequential decline from 17.38%.
- Whether expenses continue to grow faster than revenue after the latest 1.33% versus -0.08% sequential movement.
- Whether other income remains below the latest 16.46% share of pre-tax profit.