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MM Forgings Ltd. Stock Analysis

Small Cap
Evaluated by 662 users | BSE: 522241 | NSE: MMFL |
Forgings
The journey of MM Forgings started as Madras Motors Limited in year 1946 as dealers of “Royal Enfield Motor Cycles, UK” in India. 1960s and 70s witnessed a boom in the automotive industry in India and all over the world. With the foresight and vision of their founding Managing...

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 11.33%9.21%9.45%10.11%14.69%12.14%9.77%11.99%10.63%6.43%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 272350361411503502478621904727
Y-o-Y Gr. Rt.-28.7%3.1%13.9%22.1%-0.1%-4.8%29.7%45.7%-19.5%
Adjusted EPS (Rs.) 9.558.9810.1311.720.9420.7517.9928.3433.6919.15
Y-o-Y Gr. Rt.--6%12.8%15.5%79%-0.9%-13.3%57.5%18.9%-43.2%
Book Value per Share (Rs.) 53.5662.971.2881.198.56115.82130.32152.88180.71193.99
Adjusted Net Profit 23.121.724.528.250.550.143.468.481.346.2
Net Op. Cash Flow (Rs. Cr.) -6.747.957.535.3106123107-13.632.6267
Debt to Cash Flow from Ops -19.263.222.534.281.81.742.08-2821.092.12
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
MM Forgings Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 11.5%7.7%15%-19.5%
Adjusted EPS 8%-1.8%2.1%-43.2%
Book Value per Share 15.414.514.27.4
Share Price 22.6% 2.8% -1.3% -23.4%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 19.7915.4215.115.3623.3119.3614.6120.0120.210.22
Operating Profit Margin (%) 19.7117.261619.2122.0421.5119.3920.0619.1717.21
Net Profit Margin (%) 8.486.196.776.8610.069.979.0811.0296.36
Debt to Equity 11.010.850.770.80.760.711.031.581.21
Working Capital Days 14814815714011510598125142179
Cash Conversion Cycle 91948170584639466468
Entity Percentage Holding
Promoters 56.34%
Institutions 22.15%
Non-Institutions 21.52%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)
Data is not available for this company.

The 5-year analysis of MM Forgings's performance infers:

MM Forgings earnings have declined by -1.8%, whereas share price has appreciated 2.8% CAGR over the past five years, indicating the company's share price is likely overvalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of MM Forgings share prices over the last 10 years. Here is what we found out:

MM Forgings share price has appreciated 18.4% annually over the past ten years.

The journey of MM Forgings started as Madras Motors Limited in year 1946 as dealers of “Royal Enfield Motor Cycles, UK” in India. 1960s and 70s witnessed a boom in the automotive industry in India and all over the world. With the foresight and vision of their founding Managing Director S EKrishnan, they forayed into the forging business with a forge shop in Singampunari (Plant 1), Tamilnadu in year 1974 with a capacity of 780 MT per Annum.

By the mid eighties, their

The journey of MM Forgings started as Madras Motors Limited in year 1946 as dealers of “Royal Enfield Motor Cycles, UK” in India. 1960s and 70s witnessed a boom in the automotive industry in India and all over the world. With the foresight and vision of their founding Managing Director S EKrishnan, they forayed into the forging business with a forge shop in Singampunari (Plant 1), Tamilnadu in year 1974 with a capacity of 780 MT per Annum.

By the mid eighties, their forging business expanded steadily and their capacity reached 3000 MT per annum. Their dealership business was closed in theyear 1990. In year 1991, they have launched a new state of the art forging facility at Viralimalai, Tamil Nadu with a capacity of 3000 MT per annum.

They have rechristened their self as “MM Forgings Limited” in year 1993. MM as Madras Motors stands to show their roots. In year 1994, they had a major capacity addition at their Viralimalai plant(Plant 2) to 12000 MT per annum with funding from their initial public offering and financial participation from major financial institutions.

They consolidated their business during the period of 1994-2002. They have secured the confidence of major automobile manufacturers around the world. They took over Gears India Limited, Chennai, India in 1999 and established it as their Plant 3. This is a machining unit. They took over this company to cater to the demands of their customers to supply forgings in machined condition.

As the demand rose steadily over the years, they started a roll shop at Padappai (Plant 4) near Chennai in year 2002 to manufacture transmission shafts. In the same year the company commenced a wind farm near Panakudi, Tamil Nadu for generating power through non conventional methods to hedge burgeoning power costs.

To consolidate their operations, they have shifted their machine shop from Plant 3 to their Padappai facility. They have added forging capacity in this facility by adding 3 press lines in the year of 2004-2005. During these years, they have also invested heavily on their machine shop by adding CNC machines, Vertical machining centers, Horizontal Machining centers, Special purpose machines thereby developing into a full fledged machining facility.

MM Forgings has the expertise in forging wide variety of components. The company is flexible to volumes and we intend to provide one stop shop for our customers with value added services.

Product range of the company includes:

MM Forgings manufactures steel forgings in raw, semi-machined and fully machined stages in various grades of Carbon, Alloy, Micro-Alloy and Stainless Steels in the weight range of 0.20 Kg to 60 Kg.The company caters to the forging requirements of almost all sections of industry.

Milestones:

  • 1945- Incorporated as 'The Madras Motors Ltd' to trade Royal Enfield Motors of U.K.
  • 1974 -Forge Shop division started at Singampunari - 780 MTPA
  • 1974-90 -Forging activities quickly overtake dealership as Plant 1 steadily reaches 3000 MTPA capacity by mid-eighties.
  • 1990 -Last dealership of motorcyles (at Madras) closed down.
  • 1991 -Plant 2 commissioned at Viralimalai - 3000 MTPA
  • 1993 -Renamed as MM Forgings Limited to reflect the company's line of activity.
  • 1994 -Expansion of Plant 2 to 12000 MTPA with funding from IPO, IDBI & ICICI
  • 1994-ISO 9002 certified by NQA(now EAQA of UK)
  • 1999 -QS 9000 certified by AQA. Take Over of Gears India, Chennai. Established as Plant 3
  • 2002- Establishment of P4 with Roll Shop at Padappai, near Chennai to cater to the growing demands of customers for rolled forgings.Commenced Wind Farm at Panakudi (Plant 5) in Tirunelveli District for generaling power.
  • 2003 -Shifted Machine Shop to P4 to streamline operations. TPM kicked off at Plants 1 & 2
  • 2004 -Major capacity expansion to 30,000 MT with addition of 4 Press lines and expansion of machining lines. Launching High Performance Organization at Plant 4.

Achievements/ recognition:

  • Certified to ISO 9001: 2000 by NQAQSR, USA
  • Certified to QS9000 , discontinued recently
  • Recipient of EEPC (Engineering Export Promotion Council) award for export excellence for 14 consecutive years.
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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