Minor Project Report on

Madras Rubber Factory (MRF)

Submitted in partial fulfillment of the requirements

for the award of the Award degree of BBA 2023-2026

Under the Guidance of: Submitted By:

Mrs. Radhika Gupta Pushpak Kedia
Enrollment No.11914701723

Maharaja Agrasen Institute Of Management Studies

(Affiliated to Guru Gobind Singh Indraprastha University, New Delhi)

1
 Declaration

I Pushpak Kedia take this opportunity to express my profound gratitude and

deep regards to my guide Mrs. Radhika Gupta for his exemplary guidance,
monitoring, and constant encouragement throughout the course of this project.
The blessing, help and guidance given by him time to time shall carry me a long
way in the journey of life on which I am about to embark.

Last but not least, my sincere thanks to my parents and friends for their
wholehearted support and encouragement.

I also hereby declare that the project work entitled MRF under the guidance of
Mrs. Radhika Gupta is my original work and it has not been submitted earlier in
any other university or institution.

Pushpak Kedia

BBA- IIC

2
 Certificate

This is to certify that the project titled MRF is an academic work done by
Mr. Pushpak Kedia submitted in the partial fulfillment of the requirements for
the award of degree of Bachelor Of business administration at Maharaja
agrasen of institute of management studies, New Delhi under my guidance and
direction.

Mr. Pushpak Kedia has given an undertaking that the information presented in
the project has not been submitted earlier.

Radhika gupta

Professor, Maims

3
 Contents
S No Topic Page No
1 Declaration 2
2 Certificate 3
3 Chapter I 5-7
4 Chapter II 8-10
5 Chapter III 11-17
6 Chapter IV 18-24
7 Chapter V 25-30
8 Chapter VI 31-32
9 References/ 33
Bibliography
10 Appendices 33
11 List of Tables 34
12 List of Figures 35
13 QUESTIONNAIRE 36-37

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 Chapter I
Introduction and
Company History:

5
Madras Rubber Factory was started by K. M. Mammen Mappillai as a toy
balloon manufacturing unit in 1946 at Tiruvottiyur, Madras (now Chennai). In
1952, the company ventured into the manufacture of tread rubber. Madras
Rubber Factory limited was incorporated as a private company in November
1960 and ventured into manufacture of tyres in partnership with Mansfield
Tire & Rubber company based in Ohio, United States. The company went
public on 1 April 1961 and an office was established in Beirut, Lebanon to
develop the export market in 1964 and its current logo of the muscleman was
born. In 1967, it became the first Indian company to export tyres to USA.

In 1973, MRF started manufacturing Nylon tyres for the first time. The
company entered with a technical know-how collaboration with B. F. Goodrich
in 1978. The Mansfield Tire & Rubber Co sold out its share in 1979 and the
name of the company was changed to MRF Ltd in the year. The company
finalised a technical collaboration agreement with Marangoni TRS SPA, Italy for
the manufacture of pre-cured tread rubber for retreading industry. MRF tyres
supplied tyres to Maruti 800, India's first modern small car. In 1989, the
company collaborated with Hasbro International, the world's largest toy maker
and launched Funskool India. Also, they entered into a pact with Vapocure of
Australia to manufacture polyurethane paint formulations and with Italian tyre
manufacturer Pirelli for conveyor and elevator belt manufacture. During the
year 2004–05, the product range of the company expanded with Go-kart &
rally tyres and tyres for two/three wheelers.

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 BOARD OF DIRECTORS

Chairman - K M Mammen
Managing Director - K M Mammen
- Arun Mammen
- Rahul Mammen Mappillai
Company Secretary - S Dhanvanth Kumar
Promoter & Non-Executive Director - Cibi Mammen
- Ambika Mammen
Independent Director - Vikram Taranath Hosangady
- Arun Vasu
- Vikram Chesetty
- Prasad Oommen
Non-Executive Independent Director - Ashok Jacob
- V Sridhar
- Vijay R Kirloskar
- Ranjit I Jesudasen
- Salim Joseph Thomas
- Jacob Kurian
- Vimla Abraham
Whole Time Director - Samir Thariyan Mappillai
- Varun Mammen

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Chapter-II- Vision,
Mission, and
Objectives of the
company:

8
 VISION
MRF is a significant global player delighting customers worldwide
through leadership intechnology, excellence in manufacturing and
world class systems, driven by a team of motivated high performers.

The vision statement of MRF talks about the dream of the founder.
The company started off as a toy balloon manufacturer in India’s
post-independence era. The vision clearly speaks about MRF’s
aspiration to reach their goal of being a global manufacturer. Fast
forward to 2017, the company became one of the top 15 tyre
manufacturers in India.

MISSION
Zero Defect, zero break down, zero pollution and there by zero
losses with the new performance standards.

The mission statement is a continuous improvement concept that

the company should adopt to reach its vision. This statement is the
mantra of the company in all plants where the tyres are made.

“Our mission is to continue developing an aggressive, independent

national advocate for the advancement of motorcycling and its
associated lifestyle which is financially stable and exceeds the needs
of motorcycling enthusiasts”.

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 OBJECTIVES
 Maintain and improve our financial base and ensure financial stability.
 Enhance training of national, state, and local motorcyclists’ rights
activists.
 Maintain and improve our capability to be the national information
center for motorcyclists’ rights information.
 Maintain and improve our ability to act as an advocate before national,
state, and local legislative, executive, and judicial bodies and with
private or public entities regarding issues affecting motorcycles,
motorcyclists, or motorcycling.
 Maintain and improve our capability to meet and exceed the needs of
our membership base and all state motorcyclists’ rights organizations.

VALUES
 High Proprietary interest
 High Trust
 Faces all problems
 Delegates and develops
 Seeks help
 Helps others succeed
 Create high performance situations
 Innovative
 Avoids surprise
 Has process happiness

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Chapter-III-Market
linkages:

11
 Products
1.Tyres manufactures various tyres for passenger cars, two–
wheelers, trucks, buses, tractors, light commercial vehicles,
off–the–road tyres and aero plane tyres, MRF ZVTS and MRF
Wanderers for cars and SUVs, MRF Meteor all terrain tyres,
MRF Steel Muscle for trucks and buses.
2.MRF ZLX is the latest one which is well known for its
comfort in passenger segment
3.Conveyor Belting – manufactures its in-house brand of
Muscle flex conveyor belts.
4.Pretreads – MRF has the most advanced pre-cured
retreading system in India. MRF forayed into retreading in
1970 and manufactures pretreads for tyres.
5.Paints - manufactures polyurethane paint formulations and
coats used in automotive, decorative, and industrial
applications. also, indigenous Air craft tyres like Su 30 MKI
fighter for Indian Air Force.

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PRODUCT IMAGES

13
 Manufacturing facilities in India

1.Kottayam Plant in Kerala

2.Puducherry Plant
3.Goa Plant
4.Trichy Radial Plant in Perambalur District, Tamil Nadu
5.Trichy Bias Plant in Perambalur District, Tamil Nadu
6.Arakonam Plant in Tamil Nadu
7.Tiruvottiyur Plant in Chennai, Tamil Nadu
8.Medak Plant in Telangana
9.Ankenpally Plant in Telangana
10.Dahej Plant in Gujarat

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15
 MARKET SIZE OF INDIA TYRE INDUSTRY
The India tyre market attained a volume of 179.16 million
units in 2022. The market is further assessed to grow at a
CAGR of 6.68% during 2023-2028 to reach a volume of
263.26 million units by 2028.
Based on the type, the market is bifurcated into:

1.Tube

2.Tubeless

MRF MARKET SIZE

The company was founded in the city of Chennai, previously known

as Madras – hence the abbreviation MRF, which is short for Madras
Rubber Factory. Today, the manufacturer can proudly look back at its
60 years of history, and also show pride in its current annual
turnover of 42.5 billion rupees (£486 million). According to analysts,
MRF today holds a 24 per cent slice of the Indian tyre market and is
also very active in export business as well as motorsports. Company
sources state that MRF currently exports its products to 75 countries.

As recently as last December, chairman K.M. Mammen

announced that MRF Ltd. was planning to invest
approximately 5 to 6 billion rupees (£57 to 69 million) over
the coming two years into the expansion of its production
facilities. “There is an enormous demand from the domestic
replacement market as well as from the OE customers,” the
entrepreneur said during the presentation of MRF’s latest
annual report in Chennai.

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17
Chapter-IV-Financial
linkages:

18
19
 MRF Income Statement Analysis
 Operating income during the year rose 19.5% on a year-on-year
(YoY) basis.
 The company's operating profit decreased by 30.2% YoY during
the fiscal. Operating profit margins witnessed a fall and stood at
10.7% in FY22 as against 18.2% in FY21.
 Depreciation charges increased by 5.6% and finance costs
decreased by 6.7% YoY, respectively.
 Other income grew by 51.0% YoY.
 Net profit for the year declined by 47.6% YoY.
 Net profit margins during the year declined from 7.9% in FY21 to
3.5% in FY22.

MRF Balance Sheet Analysis

 The company's current liabilities during FY22 down at Rs 70 billion
as compared to Rs 73 billion in FY21, thereby witnessing an
decrease of -4.3%.
 Long-term debt stood at Rs 8 billion as compared to Rs 8 billion
during FY21, a growth of 0.7%.
 Current assets fell 2% and stood at Rs 102 billion, while fixed
assets rose 5% and stood at Rs 129 billion in FY22.
 Overall, the total assets and liabilities for FY22 stood at Rs 231
billion as against Rs 226 billion during FY21, thereby witnessing a
growth of 2%.

MRF Cash Flow Statement Analysis

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 MRF's cash flow from operating activities (CFO) during FY22 stood
at Rs -6 billion on a YoY basis.
 Cash flow from investing activities (CFI) during FY22 stood at Rs 2
billion on a YoY basis.
 Cash flow from financial activities (CFF) during FY22 stood at Rs 4
billion, an improvement of 270% on a YoY basis.
 Overall, net cash flows for the company during FY22 stood at Rs
118 million from the Rs -10 billion net cash flows seen during
FY21.
Current Valuations for MRF
 The trailing twelve-month earnings per share (EPS) of the
company stands at Rs 1,578.4, an decline from the EPS of Rs
3,012.0 recorded last year.
 The price to earnings (P/E) ratio, at the current price of Rs
77,500.0, stands at 49.1 times its trailing twelve months earnings.
 The price to book value (P/BV) ratio at current price levels stands
at 2.3 times, while the price to sales ratio stands at 1.7 times.
 The company's price to cash flow (P/CF) ratio stood at 17.0 times
its end-of-year operating cash flow earnings.

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22
STOCK PRICE HISTORY

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24
 Chapter-V-
Company Image:

25
MRF has been the bat sponsor for many great cricketers of the game.
Sachin Tendulkar, Brian Lara and Steve Waugh. Currently MRF is
endorsed by Jerome Chinia and Virat Kohli. MRF has also sponsored
Indian batsmen Rohit Sharma,[18] Gautam Gambhir, Sanju Samson
and Shikhar Dhawan. and Mignon du Preez.

Previous endorsements
 Sachin Tendulkar – India. Conqueror, Genius, Wizard
 Virat Kohli – India. Conqueror, Genius.
 Brian Lara – West Indies. Wizard, Wizard 400 (named in
honour of the 400 not out he made against England at
the Antigua Recreation Ground)
 Steve Waugh – Australia. Conqueror
 Gautam Gambhir – India. Genius
 Sanju Samson – India. Wizard
 Shikhar Dhawan – India. Genius
 Prithvi Shaw - India. Genius, Prodigy PS 100
 AB de Villiers - South Africa. Genius

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 SWOT Analysis of MRF Tyres
SWOT stands for Strength, Weakness, Opportunities and Threats. In
this, the Strengths and Weaknesses are the internal factors of the
business whereas Opportunities and Threats are the external factors
of the business.

SWOT analysis is a useful tool for an organization as it helps to

recognise the positives and the negatives in the firm.

Strengths of MRF Tyres

Strengths are the factors that keep MRF at the top position in the
industry. Following are some of the strengths of MRF:

 Marketing Strategy- MRF’s Marketing strategy is quite

ingenious. They believe in marketing through value and
credibility. Throughout the years MRF has focused on
marketing through ambassadorship by great cricketers like
Virat Kohli (current brand ambassador), A.B. Devilliers, Shikhar
Dhawan and racers such as Narain Karthikeyan and Chetan
Korada. This shows that MRF uses ambassadors who show trust
and value towards the brand and thereby reflect it onto their
brand.
 Brand Value – MRF tyres are well known for their quality of
tread rubber and durability of their tyres. The reputation and

27
 quality of MRF have greatly favoured the brand value as a
whole. Their launch of eco-friendly tyres, different tyre types
and the use of their tyres in the Indian fighter planes has
provided great value to the brand.
 Great Inventory- The inventory material and management are
top-notch with 9 technically advanced manufacturing industries
and great material quality. It has high customer satisfaction
both quality and service wise.
 Financial Stability- MRF tyres have a strong financial
groundwork; with their investment in different sporting events
and sponsoring differently they have received a great return on
investment which has made it quite stable financially.
 Competitive Advantage- By reviewing the competitor analysis
it can be said that MRF has a competitive advantage mainly in
the fields of brand reputation, value, inventories and financial
stability. The industry is still competitive but MRF still has the
edge.

Weakness of MRF Tyres

Weaknesses are the negative factors in the intern part of MRF
company. It needs to be aware of these and try to eliminate
them as soon as possible. Following are some of the
weaknesses of MRF Tyres:
 Lack of Flexibility – MRF has built a good recognition in the
past but in recent years MRF has been struggling to market
their products at the same wavelength as before. Their quality
of tyres is still maintaining its standards but they’re not able to
keep up with the recent trends which have led to their
competitors seizing the market share.

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  Decrease in Net Shareholding – Due to lack of profits, MRF has
decreased their shareholding capacities for the public, this may
sound like a positive point but since the number of investors on
the shares of MRF has decreased they may face a lack of funds
in the future ventures.
Opportunities of MRF Tyres
Opportunities are the factors that help MRF Tyres to grow in the
market. It needs to find out these opportunities in the market and
make them their strengths. Following are some of the Strengths of
MRF Tyres:

 Heterogeneity of Market – The tyre manufacturing industry is

very diverse. There are different types of tyres for different
vehicles and different purposes. From two-wheelers to
commercial planes the market has a great variety of needs and
MRF can take advantage of such opportunities.
 The rise in the Automobile Industry- The automobile industry
is booming in both India and other countries around the world.
India exports a lot of tyres around the world and MRF tyres
have a great reputation in the foreign market which would
highly benefit them. The need for automobile parts does not
seem to end as of which tyre manufacturers can benefit from it.
 Increase in Shareholders- Investors all around the world are
looking for opportunities to invest in a great company to gain
higher returns. The reputation of a company plays a major in
providing investors for the brand. MRF has a great reputation
and brand value which is very valuable in the market. Changing
things up and setting on the right track can help MRF to
increase their funds for their future ventures.

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 Threats to MRF Tyres
Threats are the external factors of MRF Tyres. These create a
negative impact on the company’s growth. Following are some of the
threats to MRF Tyres:

 Having great competition – The tyre manufacturing

industry in India has great competition in terms of both
quality and brand recognition. CEAT is one of the topmost
contenders of the brand as of now. With MRF struggling
to keep up with the trends it could become a major issue
and loss of competitive advantage if they do not find the
solution to this issue.
 Increase in cost of Raw materials- Raw material is the key
component for any product. Inflation or an increase in the
price can seriously harm the production of the goods or
worst-case scenario bring the whole production to a
standstill. Rubber is the key raw material in
manufacturing tyres; if the cost of the raw material
increases it could lead to great loss for the company.
Mainly the production of tyres could come to a standstill
leading to lack of sales.
 Cheaper product availability- Many individuals look for a
cheaper option for any product or service. Although the
quality of the product is great the consumer is ready to
compromise it if a cheaper option is available. If MRF
doesn’t go with value-based advertising they could lose
the market share to cheap rip-offs.

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Chapter-VI-Conclusion
and Your Opinion:

Conclusion-

31
After doing the business analysis and valuation analysis and when
compared with the competition, we figure out that MRF has been
the fastest growing tyre manufacturer in India and reasonably priced,
a company which has improving profitability margins and decreasing
working capital cycle.

Management Analysis of MRF Ltd

Successful execution of increase in production capacity especially by
greenfield/brownfield plants is a good indicator of competent
management. It is very good if the capacity addition has been done
without facing any delays.

MRF has a total of 9 manufacturing units across India and has grown
its production capacity along with its Turnover year on year. Has
Won JD Power Award 12 times in 16 years

After analysing the management of MRF, we can notice that it has a

competent management, which cares about shareholder’s interests
and believes in company’s future. MRF seems to have put in place a
succession plan, which would enable the next generation to takeover
the company. However, a 27.53% promoter holding is a concern.

References/Bibliography
32
en.wikipedia.org
mrf.org
www.expertmarketresearch.com
myvaluepicks.com
www.mrftyres.com
www.moneycontrol.com
equitypandit.com
in.investing.com
finance.yahoo.com
iide.co
www.drvijaymalik.com

List of Tables/Figures/Symbols

33
 LIST OF TABLES
Table No Title Page No
1 Company starts date 5

2 Board of Directors 6

3 Manufacturing Facilities 11

4 Awards won 25

5 Salaries and 25
shareholders wealth

LIST OF FIGURES
Figure No Title Page No
1 Income Statement 15

2 Cash Flow Statement 15

3 Balance Sheet 16

4 Turnover 13

5 Growth Rate 17

LIST OF ABBREVIATIONS
S No Abbreviated Name Full name

34
1 YoY Year-on-year

2 FY Fiscal year

3 CFO Cash flow from

operating activities

4 CFI Cash flow from

investing activities

5 CFF Cash flow from financial

activities

6 EPS Earnings per share

7 P/E Price to earnings

8 P/BV Price to book value

9 P/CF Price to cash flow

QUESTIONNAIRE
Dear Sir/Madam

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(Please tick ( ) appropriate answer in the box)

1. Customer Introduction

A. Name : Balpreet Singh

B. Occupation : Student

2. Which factors motivated you to purchase “MRF TYRES”

A: Friends [✔]

B: Advertisement [ ]

C: Relatives [ ]

D: Others [ ]

3. Why did you prefer “MRF TYRE”

A: Quality [ ]

B: Price [ ]

C: Service [ ]

D: Durability [✔]

4. Which brand you will prefer next time

A: MRF [✔ ]

B: APOLLO [ ]

C: JK [ ]

D: CEAT [ ]

QUESTIONNAIRE

Dear Sir/Madam

36
(Please tick ( ) appropriate answer in the box)

1. Customer Introduction

A. Name : Abhishek Jain

B. Occupation : Doctor

2. Which factors motivated you to purchase “MRF TYRES”

A: Friends [ ]

B: Advertisement [ ]

C: Relatives [ ✔]

D: Others [ ]

3. Why did you prefer “MRF TYRE”

A: Quality [ ✔]

B: Price [ ]

C: Service [ ]

D: Durability [ ]

4. Which brand you will prefer next time

A: MRF [ ]

B: APOLLO [ ]

C: JK [ ]

D: CEAT [✔]

37