Tyre manufacturer MRF on Tuesday created history on Dalal Street by becoming the first Indian company to hit a share price of Rs 1 lakh apiece.
Shares of MRF were trading at Rs 1,00,000.95 apiece, up 1.04 per cent at around 10:45 am. MRF shares had just fallen short of the milestone in May, but analysts believed that the stock was well-positioned to scale the milestone sooner or later.
While MRF is India’s costliest stock on paper, it is not the most expensive when it comes to metrics such as price-to-earnings (P/E) or price-to-book value (P/BV).
MRF shares have been witnessing robust gains in one year, up over 45 per cent. From the beginning of this year, the stock has gained nearly 14 per cent. Meanwhile, it has delivered a return of 82 per cent in the past three years.
In Q4FY23, the company’s net profit surged 86 per cent to Rs 313.5 crore, compared to Rs 168.5 crore in the same period a year ago. Its consolidated revenue from core operations also rose 10 per cent to Rs 5,842 crore in the quarter, compared to Rs 5,305 crore a year ago.
It may be noted that MRF shares are trading at a P/E multiple of 54.52 times, while it is trading at a price-to-book value (P/BV) multiple of 2.89 times. Its return on capital employed stood at 7.34 per cent and its return on equity stood at 5.23 per cent.
As the situation stands, the MRF stock is close to its lifetime highs and most analysts have a sell rating on the stock, according to Trendlyne data. On the other hand, technical analysts believe that the stock has more potential.
Sujit Deodhar, Head Technical Analyst at Wellworth Share & Stock Broking told Business Today that the MRF stock is in a “multiyear bull run and its more of an investment bet than trading”.
He added that investors with this stock should continue holding their long positions, while those looking to accumulate could utilise any dip towards Rs 89.000-90,000 levels.