Future growth expectations in sales/revenue/volumes?

Sales have been flagging for 6 to 8 quarters due to customer delays and market changes but are now being reversed. Q2 FY26 expected to be the lowest quarter; sales rebound anticipated from H2 FY26 onwards, especially with new product development and North American market traction. Target to match or slightly be below previous year’s sales, with potential growth dependent on U.S. market recovery by mid-2026. Capacity expected to increase to about 140,000 tons next year, up from current ~75,000 tons utilization, aiming to produce 80,000 to 90,000 tons. INR 300 crores incremental revenue

Future growth expectations in earnings/operating earnings/profits/EPS?

Sales expected to improve starting H2 FY '26, with Q2 likely the lowest quarter. New product development and North American market sales anticipated to gain traction from H2 onwards. Revenue for FY '26 may be close to previous year, possibly a few percentage points lower. Capacity expansion with a 16,500-ton press and an additional 4,000-ton press planned, increasing capacity to around 140,000 tons. EBITDA margins projected to improve as sales rebound, with potential margin increases from higher-value products (10-20% price improvement expected). Operating leverage and cost control e

Current/ Expected Orderbook/ Pending Orders?

The transcript does not explicitly mention a specific figure for the current or expected order book or pending orders for MM Forgings Limited. However, it is mentioned that the wholly owned subsidiary Abhinava Rizel has an annual order of around INR 20-30 crores. There has been some drop in U.S. orders but gains in Europe. The management is working to recover lost market share and expects sales to improve as customer offtake normalizes. The expectation is of sales growth by at least INR 300 crores in the next 12 to 18 months, assuming market conditions stabilize. The company is also anticipati

Any current/future new fundraising through debt or equity?

MM Forgings aims to hold debt at current peak levels (~INR850 crores net debt) and is generally averse to increasing debt further. Future debt increases may occur only under changed positive business conditions or new investment opportunities. The company plans no significant reduction in debt over the next 2 years, focusing instead on consolidating and strengthening the balance sheet via internal accruals and working capital reduction. A capital infusion through equity dilution is being considered but is presently viewed as an outlier and not a definite plan. The firm is converting rupee-deno

Any current/future capex/capital investment/strategic investment?

MM Forgings plans capital expenditure (capex) of INR70 crores in the second half of the current financial year 2025, focusing on productive assets only. For the next financial year, capex is expected to be around INR100-120 crores. Key investments include commissioning a 16,500-ton press by March/April 2026, expected to add INR300 crores turnover from FY27 onwards with better margins. An additional forging line with a 4,000-ton press is planned to raise capacity to approx. 140,000 tons next year. The company is tightly managing and rationalizing capex, postponing non-essential spending to stre

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M M Forgings LtdQ3 FY25Auto Components

M M Forgings Ltd Q3 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹461P/E: 24.9Market Cap: ₹2.2K CrSector: Auto Components

Management growth scorecard

Revenue

Category 3

Margin

Category 2

Fundraise

Yes

Order

Capex

Yes

2 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Sales have been flagging for 6 to 8 quarters due to customer delays and market changes but are now being reversed.
→Q2 FY26 expected to be the lowest quarter; sales rebound anticipated from H2 FY26 onwards, especially with new product development and North American market traction.
→Target to match or slightly be below previous year’s sales, with potential growth dependent on U.S. market recovery by mid-2026.
→Capacity expected to increase to about 140,000 tons next year, up from current ~75,000 tons utilization, aiming to produce 80,000 to 90,000 tons.
→INR 300 crores incremental revenue expected from commissioning a 16,500-ton press from FY27, with better margins on these products.
→Long-term aim to cross INR 2,000 crores in turnover, growing from a base of INR 1,500 crores with potential INR 500 to 700 crores incremental revenue from current capacities.
→Growth cautious due to volatile global conditions; gradual reversal of sales decline expected in FY27 and beyond.

Margin guidance

Category 2

→Sales expected to improve starting H2 FY '26, with Q2 likely the lowest quarter.
→New product development and North American market sales anticipated to gain traction from H2 onwards.
→Revenue for FY '26 may be close to previous year, possibly a few percentage points lower.
→Capacity expansion with a 16,500-ton press and an additional 4,000-ton press planned, increasing capacity to around 140,000 tons.
→EBITDA margins projected to improve as sales rebound, with potential margin increases from higher-value products (10-20% price improvement expected).
→Operating leverage and cost control expected to support margin improvement alongside sales growth.
→Debt levels targeted to remain stable or moderately reduced, with prudent capex of INR70-150 crores per year, supporting sustainable growth.
→Earnings growth to follow sales recovery, with cautious outlook due to macroeconomic volatility but internal efforts aimed at reversing sales decline by FY '27.

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Fundraise plans

Yes

→MM Forgings aims to hold debt at current peak levels (~INR850 crores net debt) and is generally averse to increasing debt further.
→Future debt increases may occur only under changed positive business conditions or new investment opportunities.
→The company plans no significant reduction in debt over the next 2 years, focusing instead on consolidating and strengthening the balance sheet via internal accruals and working capital reduction.
→A capital infusion through equity dilution is being considered but is presently viewed as an outlier and not a definite plan.
→The firm is converting rupee-denominated loans to foreign currency loans to reduce interest costs but without increasing total debt.
→Overall, fundraising through debt or equity is not a current priority but remains a potential option if business needs arise.

Order book

→The transcript does not explicitly mention a specific figure for the current or expected order book or pending orders for MM Forgings Limited.
→However, it is mentioned that the wholly owned subsidiary Abhinava Rizel has an annual order of around INR 20-30 crores.
→There has been some drop in U.S. orders but gains in Europe.
→The management is working to recover lost market share and expects sales to improve as customer offtake normalizes.
→The expectation is of sales growth by at least INR 300 crores in the next 12 to 18 months, assuming market conditions stabilize.
→The company is also anticipating a rebound in the Class VIII truck market from June 2026, which could positively impact order inflows.
→Overall, the focus is on reversing recent sales decline and improving margins with disciplined capacity utilization and market recovery.

Capex plans

Yes

→MM Forgings plans capital expenditure (capex) of INR70 crores in the second half of the current financial year 2025, focusing on productive assets only.
→For the next financial year, capex is expected to be around INR100-120 crores.
→Key investments include commissioning a 16,500-ton press by March/April 2026, expected to add INR300 crores turnover from FY27 onwards with better margins.
→An additional forging line with a 4,000-ton press is planned to raise capacity to approx. 140,000 tons next year.
→The company is tightly managing and rationalizing capex, postponing non-essential spending to strengthen the balance sheet.
→Some minor postponed capex (~INR25 crores) related to layout and material handling buildings is expected over the next two years.
→Investments of over INR1,000 crores have been made in the past 5 years, with current focus on ramping up sales and utilizing existing capacity.
→The wholly owned subsidiary DVS Industries is being merged into MM Forgings, potentially a strategic move.

How does M M Forgings Ltd rank vs peers in Auto Components?

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1M M Forgings Ltd

Rev 3Mar 2

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