Despite the humongous sales figure generated by the automobile sector in India and also the economic boom in the automobile sector globally, it looks like that MRF Company is still scratching the base of its net profits graph. The NRC (Natural Rubber Conundrum) has many companies importing tyres from abroad which ultimately affects the sales figures of our domestic tyre companies. Also, because of the unexpected and continuous fluctuation in the price of rubber from the past few months, domestic rubber companies have been highly affected because of it, especially MRF Limited.
MRF limited stands for Madras Rubber Factory limited. This company basically manufactures various other rubber products besides the main business of manufacturing automobile tyres. If we go according to the figures then this Madras based rubber tyre and other rubber products manufacturer has recorded a downward slope in the net profit graph of the company by receiving a decline of 14.42 percent in the net profits by the end of the third quarter of this fiscal year. The company has been able to make only Rs 102.18 crores as their net profit by the end of December 2010. During the same quarter last year, this company recorded a net profit of Rs. 119.41 crores.
The company has kept itself mum on this topic but the people are still speculating as to why such a mishap occurred. Management gurus are laying their own theories as to what is the basic problem with it since the company received a heavy sales figure after the second quarter for Rs 2,165.80 crores which was just Rs 1,653.84 crores last year in the same quarter. One such theory says that the company couldn’t match up to the rising prices. They could not adapt themselves according to the change in rubber prices But anyways, all these theories doesn’t matter until and unless the company is making enough profit to survive. Let’s hope the company will double its profits in this quarter.