M M Forgings Ltd

- As of August 2022, M. M. Forgings Limited had a gross debt of about INR 430 crore. - They expect to end the fiscal year with gross debt around INR 550 crore. - The company plans to spend around INR 250-300 crore on capex in FY ’23. - There is no explicit mention of new fundraising through equity. - The increase in debt from INR 430 crore to INR 550 crore is likely to support the capex plans. - No specific plans or announcements about raising additional debt or equity beyond this are stated in the transcript.

- FY23 capex planned around INR 250-300 crore (lower than earlier INR 400 crore estimate). - Two-thirds of capex to machining, one-third to forging, with some investment in electrical segment (~INR 15 crore). - INR 48 crore already spent in Q1 FY23; remaining to be spent during the year. - 6,300-ton press recently commissioned, increasing nameplate capacity from 100,000 to 120,000 tons, targeting 130,000 tons by year-end. - Machining mix expected to rise from 52% to 60-65% over next 18 months, potentially improving EBITDA margins. - Plans to diversify in electrical motor segment, including alternators and non-auto motors, with ongoing development of EV product portfolio (detailed info expected in coming weeks). - Debt expected to increase from INR 430 crore to around INR 550 crore by year-end to fund capex. - No immediate inorganic capex plans disclosed.

- Sales volume guidance for FY23 is projected between 80,000 to 90,000 tons, with a likely achievement around 80,000 to 85,000 tons. - Current production is on track (72,000 tons if annualized from Q1), expected to increase with better utilization. - Capex of approximately INR 250-300 crore planned in FY23, primarily towards machining (two-thirds) and forging (one-third), which is expected to enhance capacity and revenue from FY24 onwards. - EBITDA per ton is expected to improve or at least defend current margins due to increased machining mix (currently 52%, expected to rise to 60-65% over 18 months). - Domestic market is strong and expected to outperform exports; commercial vehicle and passenger vehicle segments are showing growth. - The company remains positive despite some macroeconomic uncertainties, emphasizing strong demand, especially in India. - Long-term growth anticipated from diversification into EV markets and electrical components, with plans to reveal more details soon.

- Production guidance for FY23 is maintained at 80,000 to 90,000 tons, slightly conservative considering possible tepid Q2-Q4. - EBITDA per ton for Q1 was INR33,700, expected to possibly increase to INR35,000 or more. - Margins likely steady around 18.5%-20%, with machining mix increasing from 52% to 60-65% in 18 months, expected to defend or improve margins. - Capex of INR250-300 crore planned in FY23, mainly for machining, with incremental revenue benefits primarily from FY24. - Domestic market growth strong, expected to offset export weakness; export revenues declined 6% YoY in Q1; domestic sales up ~100%. - Anticipate steady improvement in operating leverage and margin gains driven by higher value-added parts and scale. - Positive long-term outlook on EV market entry, targeting INR500 crore+ revenue over the next 7 years. - Overall optimistic on earnings growth, contingent on stable macroeconomic conditions and execution of growth initiatives.

- Demand in the U.S. has slowed down, impacting the order book for commercial vehicle (CV) parts. - The previously large backlog of orders in the classic segment in the U.S. is starting to clear. - New orders' pace has reduced, reflecting the general slowdown. - Despite a slowdown in some export markets (notably Europe), the domestic Indian market remains strong with growing customer demand. - The company expects to produce and sell around 80,000 tons in FY ’23, with some conservatism due to macroeconomic uncertainties. - The ongoing increase in machining capacity and development of new parts supports a positive outlook on future orders. - Export demand is down about 6% year-on-year, while domestic sales have nearly doubled. - Overall, the company remains positive but cautiously balanced between positives and external risks.