Comments
Centrum Wealth
MM Forgings (Buy)
CMP: ₹605.75
Target: ₹804
MM Forgings Ltd (MMFL) for Q4FY2015 reported results that were mostly in line with our expectations. Revenue grew 17.8 per cent y-o-y to ₹127 crore, Ebitda grew 20.3 per cent y-o-y to ₹27 crore with margins expanding 44 bps to 21.1 per cent. Net Profit grew 42 per cent y-o-y to ₹11 crore. Going forward, we expect MMFL to generate robust volumes growth via its exports to the US commercial vehicle (CV) segment, which is the growth engine of the company. Further, with better operating leverage as MMFL increases utilisation at its new plant and with stabilising interest costs, we expect PAT CAGR of 26.5 per cent over FY2015-17E.
According to the Society of Indian Automobile Manufacturers data, the domestic CV sales volumes grew by 2.1 per cent and 6.5 per cent y-o-y in March and April 2015, respectively, indicating that the recovery in the domestic CV cycle is gaining steam.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.