Buy MM Forgings; target of Rs 430: Anand Rathi

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Anand Rathi's research report on MM Forgings

Lower than our Rs669m estimate, MM Forgings’ Q1 EBITDA slipped 13% y/y to Rs625m due to more-than-expected other expenses. We expect 6% revenue/ EBITDA CAGRs each over FY25-28 led by 1) 4% domestic M&H CV volume CAGR over FY25-28 on economic activity and replacement demand, 2) The overseas CV sector may be muted in the near term, then re-bound in FY27/28 led by the low base and early buying before emission norms, 3) Revenue would outstrip that of the industry due to new orders, products, higher machining/heavy forgings mix and market-share gains. We introduce FY28e, with 12/15/23% revenue/EBITDA/PAT growth.

Outlook

The stock quotes at attractive valuations (~40% discount to past 1yr-fwd mean) of 11x/9x FY27e/ FY28e EPS. We retain a Buy, with a lower 12-mth TP of Rs430, 14x Sep’27e EPS (earlier Rs480, 14x Mar’27e EPS).

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MM Forgings - 13082025 - anand