Hello Sir,

Hope you are doing well.

Sometime back, I came across a stock M M Forgings (MMF).

The company manufactures forged components for automobiles (CVs and PVs), and off-highway equipment, catering to both the domestic and international markets.

The company is also working on developing EV powertrain components – Motor, Gearbox and Controller through its subsidiary Abhinava Rizel.

What’s interesting is that promoters have guided for ~15% + growth in sales in FY 24 over FY 23.

Below, we have shared interesting insights from the Q1 FY 24 con-call of M M Forgings to understand the current situation and the outlook for the company. Hope you find the details useful for your own investments or to add the stock to your watch list.


Before that, if you ever find a good stock in an ignored sector with promoter buying from market and increasing his stake, you should sit up and study the company in greater detail…something good might be brewing.

We recently released our new stock recommendation for Alpha/Alpha + members based on the same framework – for details click HERE


M M Forgings – Insights from Q1 FY 24 con-call of the company

– General Details

  • We have achieved sales of 19400 tonnes and production levels have also been similar. We have also posted 372 Crores of overall sales and EBITDA close to 18%-18.5%
  • The domestic market growing from strength-to-strength and we also see export markets to be largely static as we go forward
  • We see a significant change in the mindset of European customers as they are increasing the offerings and wanting to move away from China. The trend is very clearly seen in American customers
  • We see 2023 and 2024 to be reasonably flattish years from our discussions with customers in US; this is with regard to existing businesses, however if new businesses come in because of their wanting to have broad based their focus
  • In America, the trend is very clear people do not want to invest further in China. It will take some time for that shift to us in terms of business, but it will come I am very sure about it

– Revenue Mix

  • CV is 76% and PV is about 12%. Off highway is virtually the balance
  • Region wise – India continues to be at 65%. Europe and US closely at about 15% each and balance is South America

– Product development portfolio

  • Largely the product portfolio for this year will center on the PV side and that largely is pertaining to the Indian market
  • Gear blanks and passenger cars are being slightly delayed but they will run into production by end of Q2 of this year
  • Towards the second half of FY2025 we will start focusing on the EV market

– EV subsidiary – Abhinava Rizel

  • Product development for the powertrain for PV and LCV – The timeline would be Q1 onwards of FY2025 and opportunity is really huge. Over 7-to-10-year period we see Rizel has Rs 2000 Crores of turnover opportunity
  • The EV powertrain consists of three parts motor, gearbox and controller
  • While Abhinava Rizel had a head start in terms of motors as we approach customers we found that they needed a bundle so we are not just discussing various actions have been taken to get started with our own controllers
  • There is nobody in India making controllers of that kilowatt capacity
  • So we expect our controllers to be at least in proto phase by Q1 of next year
  • On the gearbox side technology is available within the country itself and we have gotten into two models of gearboxes at proto level. We will have to look at productizing them over the next 12-to-15- month period


  • We are targeting to invest close to 300 Crores this year. In the first quarter we have touched almost 50 crore

– Guidance

  • This year we are looking at sales and at least production in the region of 85000 to 90000 tones. Sales maybe 5% this way that way of that number
  • Sales – 1800 crore would be kind of we will work for that and I do not see us doing 2000 crore in this year
  • I expect if my export markets are pretty sluggish and domestic markets do not take off in H2 then we would see a downward revision to about 1700 crore
  • We could take Rs 35,000 per tonnes EBITDA as a broad number



Disclaimer: This is not a recommendation to buy/sell M M Forgings. The securities quoted are for illustration only and are not recommendatory.


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/


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