Indian tyre major MRF has reported a 98% increase in net profit at Rs 79.91 crore for the year ended September 30, 2006 over Rs 40.3 crore in the previous year. The company said it is to be viewed against rising raw material prices and stiff competition.

MRF’s total income including excise and other income grew by 22% to Rs 4260.73 crore ( Rs 3482.09 crore) . Net sales came to Rs 3738.95 crore ( Rs 2992.39 crore).

The net profit was after taking account exceptional income of Rs 36.41 crore and tax liability of Rs 19.90 crore. The board has declared a final dividend of 140% which along with two interim dividends of 30% each will make an aggregate dividend of 200% for last year.

MRF chairman and managing director K M Mammen told reporters on wednesday the company is embarking on capacity expansions in all the six factories over the next two years. It envisaged a capital expenditure of Rs Rs 500-600 crore during the period.

"There is a huge demand from the domestic market ( replacement market) as well as from our OEM partners. Our capacity expansion would be in line with our growth plans," he added.