The stock has increased by 257.50% in last one year, while the benchmark index S&P BSE Sensex has increased by 50.64%.
This surge in stock price was after after the company reported a strong set of numbers for the quarter ended March 2021 (Q4FY21).
On the back of healthy income, the company’s standalone profit after tax (PAT) nearly doubled in Q4FY21 to Rs 30.13 crore, up from Rs 15.01 crore in Q3FY21. In Q4FY20, it reported a profit of Rs 6.54 crore.
Net standalone sales increased 81.26 % year on year (YoY) and 32.2 % quarter on quarter (QoQ) to Rs 285.79 crore in Q4FY21. Ebitda margins increased 450 basis points (bps) quarter on quarter to an 11-quarter high of 19.8 %.
However, sales were flattish YoY at Rs 725.65 crore for the full fiscal year FY21, with margins down around 40 basis points to 16.8 % and PAT flattish YoY at Rs 46.61 crore.
For the fiscal year 2021-22 (FY22), the company declared an interim dividend of Rs 5 per share, with the record date set for July 2, 2021.
MM Forgings began as Madras Motors Limited in 1946 as dealers of “Royal Enfield Motor Cycles, UK” in India. The automotive industry in India and around the world experienced a boom in the 1960s and 1970s. With the foresight and vision of their founding Managing Director S EKrishnan, they entered the forging business in 1974, with a forge shop in Singampunari (Plant 1), Tamilnadu, with a capacity of 780 MT per Annum.
By the mid-1980s, their forging business had steadily expanded, and their capacity had reached 3000 MT per year. In 1990, their dealership business was closed. They opened a new state-of-the-art forging facility in Viralimalai, Tamil Nadu, in 1991, with a capacity of 3000 MT per year.
In the year 1993, they renamed themselves “MM Forgings Limited.” Madras Motors, abbreviated as MM, is proud of its heritage. With funding from their initial public offering and financial participation from major financial institutions, they increased capacity at their Viralimalai plant (Plant 2) to 12000 MT per annum in 1994.
Between 1994 and 2002, they consolidated their operations. They have gained the trust of major automobile manufacturers all over the world. In 1999, they acquired Gears India Limited in Chennai, India, and established it as their Plant 3. This is a unit for machining. They acquired this company in order to meet their customers’ demands for machined forgings.
In the weight range of 0.20 Kg to 60 Kg, MM Forgings manufactures steel forgings in raw, semi-machined, and fully machined stages in various grades of Carbon, Alloy, Micro-Alloy, and Stainless Steels.
Almost all industries rely on the company to meet their forging needs.
Disclaimer: This document and the process of identifying the potential of a company has been produced for only learning purpose. Since equity involves individual judgments, this analysis should be used for only learning enhancements and cannot be considered to be a recommendation on any stock or sector.