Any current/future new fundraising through debt or equity?

The company plans to invest over ₹300 Crores in capex for the fiscal year 2023. Funding for this capex will come from a combination of internal accruals and some additional borrowing. Net debt stood at roughly ₹240 Crores as of the end of the previous year. The net debt to EBITDA ratio is currently just above 1x, which is considered manageable. Even with some additional borrowing and repayments planned, debt levels might rise to 1.5x EBITDA but remain within comfortable limits. No mention of equity fundraising was made in the provided transcript. The company appears comfortable managing additi

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

MM Forgings plans to invest over ₹300 Crores in capex for FY2023. Approximately ₹200 Crores of this capex will be dedicated to expanding machining capacity. The remaining ₹100 Crores will focus on increasing forging capacity by about 10,000 tons and debottlenecking other areas. Capex spending is expected to occur mostly within FY2023. The investment is aimed at supporting growth in existing businesses and accommodating newer product launches. The company targets achieving 80,000 to 90,000 tons production in FY2023, up from about 60,000 tons in FY2022. This expansion includes commissioning a 6,

Future growth expectations in sales/revenue/volumes?

For FY2023, MM Forgings expects to produce and sell close to 80,000 to 90,000 tons, up from about 62,000-63,000 tons in FY2022 (approx. 30-50% volume growth). Projected turnover for FY2023 is about Rs. 1400 Crores, reflecting approximately 30% growth on FY2022 turnover. Of the incremental tonnage, 15,000 to 20,000 tons are expected from new product introductions (new products and organic growth split roughly 50:50). EBITDA per ton is expected to hover around Rs. 33,000 to Rs. 35,000, close to Q3/Q4 levels in FY2022. Management targets reaching 80,000 to 90,000 tons comfortably in the c

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

MM Forgings expects to achieve 80,000 to 90,000 tons volume in FY2023, a 30-50% increase over previous year. Turnover is projected around ₹1400 Crores for FY2023, implying ~30% growth. EBITDA margins expected to be stable around current levels, with EBITDA per ton hovering between ₹33,000 to ₹36,000. Growth driven by both organic volume increases and new product introductions (15,000 to 20,000 tons from new products). Acquisition of Cafoma expected to add ₹60-80 Crores turnover with EBITDA margins of 20-25%, contributing positively. Wage pressures and commodity cost fluctuations acknowledged,

Current/ Expected Orderbook/ Pending Orders?

There is a significant backlog of orders for Class 8 trucks, particularly in the US market, with waiting periods currently around 10 months. The backlog is due to chip shortages and reduced production capacity (from 100 to 80 units), causing pent-up demand. Orders currently being executed are primarily from earlier bookings; no substantial new orders for Class 8 trucks have been reported in the last six months. The company’s order book has been in place over the last two to three years. Despite inflation and possible recessionary concerns, demand is expected to remain steady or flat due to thi

M M Forgings LtdQ4 FY22

M M Forgings Ltd Q4 FY22 Earnings Call Analysis

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

Price: ₹494.05P/E: 21.2Market Cap: ₹2.4K Cr

Management growth scorecard

Revenue

Category 1

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

4 of 5 growth signals are positive — a strong management growth story.

Full analysis

Revenue guidance

Category 1

For FY2023, MM Forgings expects to produce and sell close to 80,000 to 90,000 tons, up from about 62,000-63,000 tons in FY2022 (approx. 30-50% volume growth).
Projected turnover for FY2023 is about Rs. 1400 Crores, reflecting approximately 30% growth on FY2022 turnover.
Of the incremental tonnage, 15,000 to 20,000 tons are expected from new product introductions (new products and organic growth split roughly 50:50).
EBITDA per ton is expected to hover around Rs. 33,000 to Rs. 35,000, close to Q3/Q4 levels in FY2022.
Management targets reaching 80,000 to 90,000 tons comfortably in the coming year, aiming for steady or growing demand despite inflation and economic uncertainties.
Expansion plans include ramping new products from Q2 onwards and investing significantly in machining capacity to support growth.

Margin guidance

Category 3

MM Forgings expects to achieve 80,000 to 90,000 tons volume in FY2023, a 30-50% increase over previous year.
Turnover is projected around ₹1400 Crores for FY2023, implying ~30% growth.
EBITDA margins expected to be stable around current levels, with EBITDA per ton hovering between ₹33,000 to ₹36,000.
Growth driven by both organic volume increases and new product introductions (15,000 to 20,000 tons from new products).
Acquisition of Cafoma expected to add ₹60-80 Crores turnover with EBITDA margins of 20-25%, contributing positively.
Wage pressures and commodity cost fluctuations acknowledged, but steel prices expected to decline in Q2 2023, potentially improving margins.
Management targets 80,000 to 90,000 tons production/sales and corresponding earnings growth with no significant margin erosion expected.
Long-term capex and expansion aimed at sustaining growth through cycles, targeting payback of 5-6 years.

See what M M Forgings Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes

The company plans to invest over ₹300 Crores in capex for the fiscal year 2023.
Funding for this capex will come from a combination of internal accruals and some additional borrowing.
Net debt stood at roughly ₹240 Crores as of the end of the previous year.
The net debt to EBITDA ratio is currently just above 1x, which is considered manageable.
Even with some additional borrowing and repayments planned, debt levels might rise to 1.5x EBITDA but remain within comfortable limits.
No mention of equity fundraising was made in the provided transcript.
The company appears comfortable managing additional debt for growth and capacity expansion without immediate plans for equity raise.

Order book

Yes

There is a significant backlog of orders for Class 8 trucks, particularly in the US market, with waiting periods currently around 10 months.
The backlog is due to chip shortages and reduced production capacity (from 100 to 80 units), causing pent-up demand.
Orders currently being executed are primarily from earlier bookings; no substantial new orders for Class 8 trucks have been reported in the last six months.
The company’s order book has been in place over the last two to three years.
Despite inflation and possible recessionary concerns, demand is expected to remain steady or flat due to this backlog.
The pent-up demand might help the industry ride through a slowdown.
The current waiting time and backlog cannot disappear overnight and are expected to sustain demand levels.

See what M M Forgings Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes

MM Forgings plans to invest over ₹300 Crores in capex for FY2023.
Approximately ₹200 Crores of this capex will be dedicated to expanding machining capacity.
The remaining ₹100 Crores will focus on increasing forging capacity by about 10,000 tons and debottlenecking other areas.
Capex spending is expected to occur mostly within FY2023.
The investment is aimed at supporting growth in existing businesses and accommodating newer product launches.
The company targets achieving 80,000 to 90,000 tons production in FY2023, up from about 60,000 tons in FY2022.
This expansion includes commissioning a 6,300-ton press in June, expected to add 8,000 to 12,000 tons capacity during the year.
MM Forgings considers the incremental capex prudent despite the cyclical nature of the commercial vehicle industry, emphasizing readiness to ride the business cycles.

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