Hold MM Forgings; target of Rs 330: ICICI Direct

ICICI Direct's research report on MM Forgings

MM Forgings (MMF) reported weak Q1FY21 results in line with large volume declines both domestically and globally in key user industries i.e. CV & PV during the Covid impacted quarter. Net standalone sales were down 64.4% YoY to Rs 73 crore. Margins fell ~510 bps QoQ to 9.1%, impacted by inventory adjustment. MMF posted loss at PAT level at Rs 5 crore for Q1FY21.

Outlook

We value the company at 17x FY22E EPS of Rs 19.6/share to arrive at a target price of Rs 330. We assign a HOLD rating to the stock.

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