Accumulate MM Forgings; target of Rs 1410: CD Equisearch

CD Equisearch recommended accumulate rating on MM Forgings with a target price of Rs 1410 in its research report dated July 08, 2024.

Broker Research

July 08, 2024 / 12:40 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

CD Equisearch's research report on MM Forgings

The Company reported 4.1% y-o-y growth in revenue in Q4FY24, and rise in operating profit by ~ 18% (y-o-y), to Rs 75.26 crs from Rs 64.01 crs in Q4FY23. The revenue of MM Forgings grew by 8.1% in FY24 to Rs 1,527.08 crs from Rs 1412.78 crs in FY23. The year saw a higher overseas demand leading to 15% surge in exports as compared to last year. The domestic business contributed ~ 65% to the revenue. Contribution of products in revenue mix being 81% from commercial vehicle, 10% from passenger vehicle and rest from off-highway. • The Company was able to avail better raw material prices and the product mix also improved. This led to having better margins in Q4FY24. The Tamil Nadu government has decided to increase the power rate by 5% every year, leading to an increased power cost for the Company. MMFL is looking forward to overcome this cost by using renewable energy (wind and solar power). The Company is modifying itself to become more focused on machining rather than just focusing on forging. Currently, machining constitutes to around 60% of the sales and is expected to reach at 75%.

Outlook

MMFL is pulling over all stops to boost exports. Weighing odds, we assign ‘accumulate’ rating on the stock with revised target of Rs 1410 based on 18x FY26e earnings.

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