M M Forgings Ltd Q4 FY26 Earnings Analysis

- MM Forgings expects a strong revenue outlook for FY '27 with growth driven by current capex and committed customer orders. - Anticipated sales growth of INR 300 crores over FY '26, mainly from increased volumes in existing products and new product launches. - Export revenue is expected to increase by INR 50-75 crores, particularly from the U.S. Class 8 truck market, starting Q4 FY '26 and fully realized in FY '27. - The new 16,500-ton press will begin commissioning early next year but will add minimal revenue in FY '27; significant revenue from this press (INR 300 crores) is expected over 2-3 years, by FY '28 or FY '29. - Domestic CV segment growth expected around 10%, with CV constituting about 75% and PV about 10% of sales mix in FY '27. - New customer additions and product launches in the PV segment and electrical vehicle subsidiary Abhinava Rizel will contribute to growth. - Long-term goal includes reaching INR 3,000 crores turnover with 20% EBITDA margin by 2030, with a strong possibility.

- Export revenue is expected to grow, particularly from the U.S. market, contributing INR 50-75 crores increase in sales in FY'27. - Value-add machining is anticipated to increase, which alone will contribute to EBITDA growth. - The 16,000-ton press will start operations in FY'27 but is not expected to add significant revenue immediately; full revenue potential (~INR 300 crores) will be realized in 2-3 years. - The company targets INR 3,000 crores turnover and 20% EBITDA margin by FY 2030 with a strong probability. - Gross margins have improved by about 3% compared to the previous year; expected to return to original levels (~58-59%). - Interest costs are planned to be reduced substantially from around INR 80 crores to INR 55 crores next year, supporting margin improvement. - EBITDA and PAT margins are expected to improve in FY'27 compared to current levels.

- Focus on capex already done and committed to customers; no aggressive pursuit of new opportunities currently. - Capex for FY '27 planned around INR 125-175 crores (guidance of about INR 150 crores). - Capex spent in FY '26 approximately INR 135-137 crores; about INR 50 crores still to be spent related to the 16,000-ton press. - New 16,500-ton press to be commissioned early FY '27; expected future revenue potential of around INR 300 crores (over a few years). - Capex spending aimed to match debt repayment to maintain or reduce gross debt levels; no additional debt increase planned. - Strategic focus includes tie-ups to expand product offerings in the electric vehicle (EV) segment (Abhinava Rizel subsidiary), targeting 5-in-1 or 6-in-1 solutions beyond motor design. - Emphasis on cost control, automation, productivity, and strengthening balance sheet alongside capex activity.

- The company is considering options for raising funds to reduce debt, including rights issues, preferential allotments, or Qualified Institutional Placements (QIP). (Page 16) - Currently, they are "mulling" over these options but no firm plans have been announced yet. (Page 16) - Debt repayment is ongoing, with INR160-175 crores repaid annually, and the strategy is to maintain or reduce gross debt levels by matching new borrowing with repayments. (Pages 15, 9) - Planned capital expenditure for the next year is about INR125-175 crores, funded through current borrowing capacity without increasing overall debt. (Page 9) - No explicit confirmation of immediate equity fundraising; focus appears on debt management and controlled capex. (Pages 16, 9)

- MM Forgings is currently in inquiry mode for the new 16,500-ton press orders; no firm orders or financial commitments have been finalized yet. - The company expects to generate around INR300 crores in additional revenue over the next 2-3 years from new orders excluding the 16,000-ton press. - Around INR75 crores of this revenue increase is expected from exports (especially the U.S. market), with the balance coming from volume growth in domestic markets and new product launches. - For the EV subsidiary Abhinava Rizel, new customer additions are anticipated within weeks, indicating pending order finalizations soon. - Overall, there is a strong focus on converting inquiries from major customers into confirmed orders after commissioning the new press.