MRF to increase tyre production capacity – reports
Tyre major MRF Ltd is reportedly increasing tyre production capacity at its eight manufacturing facilities across the country as part of its capital expenditure plan. “The company, in line with its long term strategy, proposes to increase capacities across all its existing factories,” MRF said in its reply to the Bombay Stock Exchange (BSE).
According to Indian the Economic Times newspaper, the stock exchange had sought clarification from the company over reports about its investment plans. The reports had said MRF planned to invest around 40 billion rupees (£413 million, 524 million euros, US$646.46 million) over the next three years to build up additional capacity and for introducing new products.
“These proposals are an ongoing process in the company as part of its capex plan over a period of time, for its eight factories situated at various places in the country,” the Chennai-based company told Economic Times. MRF added that the capital expenditure figures mentioned in the reports were “broad estimation[s]” and which are dependent on cash flow and subject to review. Therefore this should also be seen as “tentative”, MRF representatives added.
In response to the news, MRF shares rose 2.59 per cent over previous close at the BSE.
4Q profits up 72 per cent
The news follows fourth quarter financials published on 26 November, which showed that MRF Ltd increased net profit 72.14 per cent to 316.91 million rupees for its fourth quarter ended 30 September 2014 due to “robust sales”. In the same period in 2013 MRF posted net profit of 184.10 million rupees during the same period of previous fiscal.
Net sales of the company rose to 33.6 billion rupees for the fourth quarter. It was 31.46 billion rupees in the fourth quarter of the previous year. cja