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HomeInvestmentsIn a first for an Indian stock, MRF crosses Rs 1 lakh...

In a first for an Indian stock, MRF crosses Rs 1 lakh mark; up 600% in 10 years.

MRF, a tyre manufacturer based in Chennai, became the first stock to exceed the Rs. 1 lakh-price threshold on Tuesday, marking a new Dalal Street milestone. On Tuesday, the stock increased by almost 2%, closing the day at Rs 99,988 on the BSE, while its shares reached an intraday 52-week high of Rs 1,00,300.

For more than a decade, Tendulkar and other cricketers, including Virat Kohli, supported the MRF Company. When Sachin Tendulkar announced his retirement in mid-June of that year, the MRF stock was trading at about Rs 14,300. It is now worth Rs. 1 lakh.

Also read, Private life insurers grow 10% in May, LIC shrinks 6%.

Is the high stock value of MRF a good thing or not?

Is MRF now the most valued stock as a result? Actually, no. A high asking price is not always a good sign for a company’s stock, according to analysts. They asserted that factors such as market capitalization, price-to-earnings (P/E) ratio, profit, and other company measures must be considered. For instance, the company does not rank among the top firms in terms of valuation with a market cap of Rs 42,390 crore. RIL, which has a market cap of over Rs. 17 lakh crore, is in first place, followed by TCS, which has a market cap of just under Rs. 12 lakh crore. TCS shares ended the day at Rs 3,244 a share, while Reliance’s stock closed at Rs 2,520 on Tuesday.

How did the MRF stock reach this milestone? MRF hasn’t split or boosted its stock in nearly 50 years, despite businesses frequently doing so to make their shares more accessible to regular investors. The price of its shares as a result was high.

According to an analyst, businesses that intend to maintain a more institutional shareholding do not frequently choose to split their stock. Retail investor share ownership (up to Rs 2 lakh) in MRF was 12.7%. A request for feedback from the company received no response.

The company’s consolidated income for 2022–2023 increased 19% year over year to Rs 23,008 crore. In the same time frame, profits increased 15% to Rs 768 crore. According to Motilal Oswal Securities analysts, MRF’s industry peers are giving it a tougher time to compete.

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