M M Forgings

M M Forgings reported a strong recovery in the third quarter, with the fourth quarter also expected to be robust. Management anticipates achieving a similar turnover to the previous year, with a slight growth of one or two percentage points. Looking ahead to FY27, the company projects a significant 20% revenue growth, driven by strong performance in both the US and Indian truck markets. Past growth was impacted by customer project delays and macroeconomic conditions.

The company is actively commissioning a 16500-ton press and a 4000-ton press, which will collectively increase its total capacity to 150,000 tons. For FY27, the internal goal is to achieve a utilization rate of 90,000 to 110,000 tons. The 16500-ton press is specifically designed for crankshafts and higher-weight front axle beams, primarily targeting the export market, and is expected to contribute approximately ₹300 crores in turnover.

M M Forgings has implemented several cost-saving initiatives. Effective January 18, 2026, the company transitioned to 100% green power, which is projected to save ₹15 crores annually and improve EBITDA by 100 basis points. Additionally, efforts to reduce interest costs are expected to yield savings of ₹30-35 crores annually, positively impacting PAT. Management is confident that gross margins will recover to the 57-58% range, supported by an improving machining mix from new job additions.

The US market, which previously accounted for 16-17% of sales, had declined to 9% but is now showing a strong recovery, evidenced by a surge in Class 8 truck orders in February 2026. Domestically, the company addressed past underperformance relative to the CV industry, which was attributed to customer-side delays and internal execution issues. These issues have been resolved, and M M Forgings expects to improve its market share going forward^⏳.

The company has invested ₹70 crores in its subsidiary, Abhinava Rize, which currently operates with a burn rate of ₹1 crore per month. Abhinava Rize specializes in motors ranging from 3kW to 300kW, primarily serving the three-wheeler market. The subsidiary is actively working to secure customers for four-wheeler applications and expand its product portfolio to offer end-to-end solutions, including controllers and gearboxes, by collaborating with Chinese companies.

For FY27, M M Forgings plans a capex of ₹160-200 crores, primarily for completing the new presses and machining side investments, which will be funded through internal accruals. The company's internal plan is to maintain static debt levels for the next two years, ensuring they do not increase from the approximate ₹1200 crores reported as of September. Management also indicated that an equity infusion is under consideration, depending on future business requirements.