Story:MRF Limited, together with its subsidiaries, engages in the manufacture, distribution, and sale of tyres for various kinds of vehicles in India. It offers tyres for passenger cars, OTRs, trucks and busses, LCVs, and farm service vehicles, as well as for two wheelers, including motor bikes and scooters. The company also provides tubes; flaps; tread rubber; and conveyor belts under the brand name of MUSCLEFLEX for applications in the mining, quarries, ports, thermal power plants, cement plants, steel plants, fertilizer plants, paper manufacturing, and fertilizer industries; specialty coatings comprising paints and coats; sports goods; and MRF PRETREADS, a precured retreading system for retreading radial tyres of truck, bus, LCV, and passenger vehicles. In addition, it operates MRF T&S shops for tyre shopping and wheel balancing services; and offers tyredrome and tyre maintenance services, as well as training to unemployed young men in light and heavy commercial vehicle driving through its MRF Institute of Driver Development. The company exports its tyres and conveyor belts to America, Europe, the Middle East, Japan, and the Pacific region.Rise in the price of rubber, the key raw material for tyres and a slowdown in the domestic automobile industry saw tyre stocks turning out of favour last year.MRF was no exception. For the year ended September 2011, adjusted net profits were down four per cent to Rs 339 crore. As raw material as a percentage of sales rose to 76 per cent (from 69 per cent in the previous year), operating margins dropped by 3 percentage points year-on-year to 8 per cent. Mirroring this sentiment, the stock remained range-bound for most part of the last 12 months, returning about 5 per cent in the April-December 2011 period. Much of the gains for the stock have hence come about beginning January 2012. A rally in the broader markets, coupled with an improved outlook for tyre makers for the current fiscal has been the reason for the same.From the April 2011 peak of about Rs 240 a kg, rubber prices have now eased by about 20 per cent. Besides, considering the double-digit growth in auto volumes in 2009-10 and 2010-11, demand for replacement of these tyres will kick in shortly.Replacement sales are higher margin yielding than sale to auto manufacturers. MRF, being one of the biggest players in the industry, will be a beneficiary of these trends.