MRF sees costs eroding margins; eyes healthy sales

MRF Ltd, India's top tyre maker, reported a nearly 40% rise in Jan-March net profit but said operating margins may narrow because of a surge in commodity prices.                                           

"The EBITDA margins have taken a drop, though our topline has grown. There is a significant cost push, to put it mildly," Koshy Varghese, executive vice president, marketing told Reuters.          

Prices of natural rubber, a key commodity for tyre makers, had hit a record high of Rs16,950 earlier in April. They are currently at Rs16,800. "In the current situation, you cannot pass on that type of an increase into the market".                                           

He however said sales would continue to grow on a buoyant domestic automobile market.