Broker’s call: MM Forgings (Accumulate)

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Target: ₹1,410

CMP: ₹1,315.40

The company has reported 4.1 per cent y-o-y growth in revenue in Q4FY24, and rise in operating profit by about 18 per cent (y-o-y), to ₹75.26 crore from ₹64.01 crore in Q4-FY23. The revenue of MM Forgings grew by 8.1 per cent in FY24 to ₹1,527.08 crore from ₹1,412.78 crore in FY23.

The year saw a higher overseas demand leading to 15 per cent surge in exports as compared to last year. The domestic business contributed about 65 per cent to the revenue.

Contribution of products in revenue mix being 81 per cent from commercial vehicle, 10 per cent from passenger vehicle and rest from off-highway.

The stock is currently trading at 17.7x FY25 EPS of ₹71.81 and 16.2x FY26 EPS of ₹78.35. The company anticipates a growth of nearly 10 per cent in both domestic and export sales in FY25. Cost optimisation and product diversification would be seen as major revenue growth drivers going ahead.

Value addition would play a key role as investments in machining are being ramped up; though spasmodic nature of CV industry needs little mentioning. MMFL is pulling over all stops to boost exports.