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ICICI Direct Report
MM Forgings Ltd. is a prominent forging player serving India, Europe and U.S. markets (FY22 geographical mix – domestic ~46%, exports ~54%).
The company reported healthy Q4 FY22 results. Standalone revenue was at Rs 313.6 crore up 10% QoQ. Ebitda margins were at 17.8%, down 160 basis points QoQ, amid ~85 bps QoQ gross margin decline as well as higher overhead costs.
Consequent profit after tax de-grew ~6% sequentially to Rs 29.2 crore.
MM Forgings guides for 80,000-90,000 tonnage in FY23E versus ~62,000 tonnage in FY22.
Key triggers for future price performance:
healthy demand outlook across served markets. Likely beneficiary of cyclical upswing in the domestic commercial vehicle space as well as U.S. Class-8 trucks.
with introduction of new products as well as increasing share of machining in product profile, sales are seen growing at a compound annual growth rate of 28.3% over FY22-24E.
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