The Hindu Business Line : M M Forgings bets on new products

Chennai, Feb. 20 Chennai-based M M Forgings Ltd believes growth will come from its development of new forging products for its customers; products that will supplement the existing range.

The company expects to end the current year with a turnover of Rs 190 crore, a shade higher than last year, but its Managing Director, Mr Vidyashankar Krishnan, believes that next year will be much better. The company has Rs 50 crore of orders on hand.

But more important, he feels, is that the company has “around 120 products in the pipeline worth Rs 90 crore of new business.”

M M Forgings has a design centre at its plant near Tiruchi, from which the company derives capability to develop products for its customers. With input costs (especially steel prices) going up, the company has given a renewed thrust on product development, to move up the value chain and win customers. “We have cranked up our product pipeline,” Mr Vidyashankar told Business Line recently.

In the first nine months of the current year, the company achieved a turnover of Rs 141 crore, up from Rs 130 crore for the same period last year. Mr Vidyashankar is confident that the company would achieve a turnover of Rs 250 crore next financial year.

The biggest issue facing the company, like for others in the auto components industry, is the rise in steel prices. “We are in a situation where we have to ask for price increases even before we supply the product,” he said. M M Forgings is a large exporter too and appreciation of the rupee has not helped matters either. Hit by input cost increases on the one hand and rising rupee on the other, margins are under pressure.

“So far we have been able to get price increases from our customers,” he said, “but we are reaching a stage when they (customers) will begin to look at other options.”

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