MRF hit a new 52-week today in the early morning trades, hitting a high at Rs.33,500. Since then it has come off the highs and is now slipping into the red, down less than 0.5% at Rs.32,900.

The stock is volatile today, first reacting to the strong Q4 numbers and then profit booking taking over. The company ended its Q4 (year ending 30^th Sept) on a high note with net profit rising 72%at Rs.317 crore on a 7% (YoY) rise in net sales. The lower rubber costs have helped as raw material cost, as a percentage of net sales was down from 65% to 61% and overall operating cost was down from 89% to 85%. Other income of Rs.25 crore compared to Rs.12 crore in previous Q4 also helped. This bottomline was not withstanding the 14% rise in interest outgo and 24% jump in tax.

The company ended the year with a consolidated net profit at Rs.908 crore, up 12%. The biggest plus point of MRF is its low equity base of Rs.4.24 crore and a massive reserves of Rs.4535 crore. It has been a “bonus candidate” for years but remains elusive as ever. Cash as at 30^th Sept 2014 stood at Rs.728 crore, up from Rs.337 crore in 2013. EPS stands at Rs.2142 (face value Rs.10) and this discounts the current price by over 15 times. Market cap is at Rs,14,032 crore.