Anand Rathi's research report on MM Forgings
Broadly in line with our Rs774m estimate, MM Forgings’ Q2 EBITDA grew a healthy 7% y/y to Rs769m. We reckon the domestic M&H CV volume uptrend would hold at a 5% CAGR over FY24-27, on economic activity and replacement demand. Growth would be driven by new products (gear blanks, long shafts, larger crankshafts) and market-share gains. The stock quotes at attractive valuations of 13x/11x FY26e/FY27e EPS (a huge discount to peers BHFC’s and RMKF’s). With a higher walletshare and sharper focus on EV-specific components, its outperformance would persist.
Outlook
The stock is among our preferred picks in ancillaries. We introduce FY27e, with 14%/15%/21% growth in revenue/ EBITDA/PAT. We retain a Buy, with a lower 12-mth TP of Rs720, 16x FY27e EPS (earlier Rs750, 18x FY26e EPS).
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