Q1FY22 Company Update - MM Forgings - ICICI Direct

MMF posted decent Q1FY22 results.

- Standalone revenue decline was limited to 16.2% QoQ at Rs. 239 crore vs. >50% M&HCV volume decline domestically; largely aided by exports

- EBITDA margins were down ~170 bps QoQ to 18.1%, tracking negative operating leverage; gross margins rose ~100 bps sequentially

- Consequent PAT declined ~21% sequentially to Rs. 24 crore

Key triggers for future price performance

- Healthy outlook across served markets; would benefit from impending India CV revival as well as pick-up in US Class 8 truck ordering. Underlying market growth, new product introduction to lead to 31.1% FY21-23E sales CAGR

- We expect sales volume to grow at 27.5% CAGR in FY21-23E to ~78,000 tonne in FY23E vs. ~48,000 tonne clocked in FY21

- Operating leverage gains, better mix to push margins to 20% (FY23E)

- FY23E RoCE at ~15% on margin improvement, sweating of assets

- Trades at inexpensive valuation of ~12x PE, ~8x EV/EBITDA on FY23E

For details, click on the link below: Link to the Report

Shares of M.M.Forgings Ltd. was last trading in BSE at Rs. 725.35 as compared to the previous close of Rs. 703.75. The total number of shares traded during the day was 872 in over 190 trades.

The stock hit an intraday high of Rs. 729.3 and intraday low of 702.15. The net turnover during the day was Rs. 620547.

Source : Equity Bulls

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