Thu Jan 25, 2007 11:45 PM IST
MUMBAI (Reuters) - Tyre maker MRF Ltd. will hike prices if the cost of rubber, a key raw material, hovers at the current high levels, a senior official said on Thursday.
Rubber prices have risen to more than 100 rupees a kg and, at current levels, would hamper the company's Jan-March performance, Executive Director-Marketing, Philip Eapen, told Reuters over telephone.
"At this price we are not looking at a bright quarter," he said. "When rubber plays truant, there is nothing we can do. We are considering options, but will wait for some time."
Earlier on Thursday, MRF said net profit in the quarter to December more than doubled to 289.6 million rupees on weaker rubber and oil prices. Sales in the period rose 30 percent to 10.6 billion rupees.
Rubber prices slid to an eight-month low of 85 rupees a kg in September from a peak of 105 rupees and have stayed under 90 rupees till recently. Inputs, primarily rubber and crude-based derivatives, make up 70 percent of the cost of a tyre.
On Thursday, the benchmark Tokyo rubber futures for June delivery settled at 278.8 yen ($2.30) per kg, near the five-and-a-half month high of 282.2 yen.
On Tuesday, MRF's rival Ceat Ltd. also said it plans to raise prices in a few weeks as it battles thin margins amid a continuous rise in rubber prices.
Indian tyremakers raised prices between 10-15 percent in 2006, on the back of a 20 percent rise in raw material prices.
MRF shares closed half a percent down at 4,176.40 rupees in a firm Mumbai market.
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