MRF, the Chennai-based tyre maker, said net profit fell about 28% to INR 3.69 billion in the September quarter from INR 5.12 billion a year earlier, as the cost of natural rubber and other raw materials outran price increases, Reuters reported on Tuesday. Revenue from operations rose almost 18% to INR 85.24 billion.

The result was one of several this week in which Indian manufacturers grew sales but lost margin. Cochin Shipyard, the Kochi-based shipbuilder, said consolidated profit roughly halved, and its shares fell as much as 7.94% on Wednesday while the broader market rallied. For investors in Asia who have bought Indian industrials for their growth, the numbers are a reminder that input costs and contract margins can erase the benefit of rising revenue.

MRF: demand held up, rubber did not

MRF's total expenses rose more than 22% in the quarter, and the cost of materials consumed rose about 44%, according to the Reuters report carried by Business Standard. Reuters linked part of the cost increase to the war in the Middle East and said natural rubber prices had stayed high because of supply shortages and poor weather in the main producing countries.

Tyre makers raised prices in response, but not by enough to protect earnings. Demand itself was steady: Reuters described it as resilient in the July to September period, helped by regular dispatches from carmakers. Rivals JK Tyre and CEAT also reported lower profits for the quarter as higher raw material prices squeezed margins, the report said.

The company declared an interim dividend of INR 3 a share for the fiscal year ending in March.

Reports of the result do not all use the same basis. A Business Standard market preview published on Wednesday put MRF's net profit at INR 4.17 billion, down 22.8%, on revenue of INR 86.60 billion, up 17.4%. The two sets of figures appear to describe different reporting bases; both show a profit decline of more than a fifth.

Carmakers have been the source of much of that steady demand, with Maruti Suzuki reporting record October sales during the festival season.

Cochin Shipyard: the shipbuilding margin slips

Cochin Shipyard's consolidated net profit fell 49.9% to INR 537.7 million in the September quarter from INR 1.08 billion a year earlier, even as revenue from operations rose 12% to INR 12.49 billion, Business Standard reported. Earnings before interest, taxes, depreciation and amortization fell 31%, and the margin narrowed by 250 basis points to 4.1%.

The weakness came from building ships. The shipbuilding division posted a loss of INR 61 million at the level of earnings before interest and taxes, with ship repair partly offsetting it. Both revenue and profit missed estimates from Antique Stock Broking, according to the report.

The stock fell to an intraday low of INR 1,186.75 on the BSE on Wednesday, down 7.94% from the previous close of INR 1,289. At 9:35 a.m. it was down 7.5% at INR 1,192, while the Sensex was up 1.5% at 82,345. About 2.5 million shares changed hands on the two exchanges by then.

Antique kept a hold rating and cut its target price to INR 1,407 from INR 1,671. It lowered its earnings estimates by 13.7% for fiscal 2027, 12.1% for fiscal 2028 and 12.5% for fiscal 2029. The brokerage said the stock trades at 32 times its fiscal 2028 earnings estimate, a premium to listed defence shipbuilding peers that limits near-term gains.

The longer-term case rests on the order book, which Antique estimates at INR 219 billion. It includes anti-submarine warfare corvettes, next-generation missile vessels for the Indian Navy and container ships powered by liquefied natural gas. Antique expects the corvette deliveries to be completed by the first half of fiscal 2029 and work on the missile vessels to pick up from fiscal 2028. Cochin Shipyard is also the lowest bidder, pending award, for the navy's next-generation survey vessel programme, worth about INR 50 billion, the brokerage said.

Appliances and electric buses

The cost squeeze reached consumer durables as well. Whirlpool of India said consolidated net profit fell 40% to INR 250.8 million in the September quarter, though revenue rose 13.7% to INR 18.73 billion, according to the Business Standard preview.

Not every result went the wrong way. Olectra Greentech, which makes electric buses, reported a 5.4% rise in net profit to INR 521.2 million on revenue of INR 6.87 billion, the same report said.

For the tyre makers, the next test is whether price increases catch up with rubber in the December quarter. For Cochin Shipyard, investors will watch whether the navy formally awards the survey vessel contract, which would add about a quarter to Antique's estimate of the order book.