M M Forgings Limited

Industrials — Metal Fabrication · NSE

₹530.00+₹5.20 (+0.99%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

The 60-second version of M M Forgings Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

M M Forgings Limited, together with its subsidiaries, manufactures and sells steel forgings in India.

IndustryMetal Fabrication

SectorIndustrials

Employees2,327

Annual revenue₹1,590 Cr

How does it make money?

Turns over ₹1,590 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 2,327 employees supports ₹68.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹68.3 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 11.9% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE18.7%

What is the outlook?

2 analysts covering the stock expect revenue to grow about 15.3% and earnings to grow about 27.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+15.3%

Est. earnings growth+27.9%

Analysts2

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +9% while net margin moved -29% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+9%

Margin effect-29%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 2.8% — barely ahead of inflation
✗ Profit has declined at 8.3% a year

Quality vs. Valuation

Company Quality

41/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

50/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

15.1x

3Y Median

16.5x

40 monthly readings · mean 15.5x · range 6.0x–31.8x

Sector Median

12.2x

median of 4 sector peers

🟡Currently trading close to its 3y median of 16.5x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 24% above the peer median of 12.2x.

vs. its own history

Fair

16.5x median over 40 months · -8%

vs. sector peers

Expensive

12.2x median of 4 peers · +24%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 19.0% to 10.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 19.9% to 11.9% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 63% over 3 years, from ₹756 Cr to ₹1,235 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 113% against revenue up 9% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 3.8x to 2.5x.
🟡Profit is decliningFinancial
Net profit is down 23% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 4.2x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 113% against revenue up 9%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 24% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 2.8% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 19.0% to 10.1%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 17%✓ 18.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 2.5x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 2.8% CAGR
Latest reported year was 16.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹38 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 7 neutral · 0 weak

Market Cap

₹2,559 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.1x

Fair

Fairly valued against the generic band

P/B Ratio

2.62x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹35.07

Profitable

Profitable on a per-share basis

ROE

10.1%

Moderate

Moderate capital efficiency

ROCE

11.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.27x

Moderate

Moderate leverage

Revenue Growth (YoY)

16.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

78.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.75%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹38 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

12.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

10.7%

Average

Average margins

Net Margin

6.9%

Average

Average bottom-line conversion

Current Ratio

1.17

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.91

Market-like

Moves roughly in line with the market

52W Range Position

60%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

579.5 / 611.4

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

26.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,462 Cr	₹1,563 Cr	₹1,525 Cr	₹1,590 Cr	+2.8%
EBITDA	₹285 Cr	₹313 Cr	₹319 Cr	₹296 Cr	+1.2%
EBITDA Margin	19.5%	20.0%	20.9%	18.6%	—
PAT (Net Profit)	₹128 Cr	₹135 Cr	₹123 Cr	₹99 Cr	-8.3%
EPS	₹26.5	₹55.94	₹25.52	₹20.44	-8.3%
ROE	19.0%	17.1%	13.8%	10.1%	—
ROCE	19.9%	18.9%	14.4%	11.9%	—
Total Debt	₹756 Cr	₹931 Cr	₹1,185 Cr	₹1,235 Cr	+17.8%
Free Cash Flow	-₹41 Cr	-₹105 Cr	-₹221 Cr	₹38 Cr	—

🟢 Revenue has grown at 2.8% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (1.2% a year).

🟡 EBITDA Margin has held roughly flat at 18.6% over 3 years.

🔴 PAT (Net Profit) has shrunk at 8.3% a year over 3 years.

🔴 EPS has shrunk at 8.3% a year over 3 years.

🔴 ROE has fallen from 19.0% to 10.1% over 3 years (-8.9 pts).

🔴 ROCE has fallen from 19.9% to 11.9% over 3 years (-8.0 pts).

🔴 Total Debt has grown at 17.8% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹41 Cr to ₹38 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,496 Cr

Total Liabilities

₹1,521 Cr

Cash & Equivalents

₹225 Cr

Operating Cash Flow

₹228 Cr

Capex

-₹190 Cr

Shareholding (proxy)

Institutional Holding

8.6%

Insider Holding

60.9%

Corporate Actions

Dividend Rate

₹4

Ex-Dividend Date

12 Jun 2026

Analyst Consensus

Recommendations

3 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹734.67

+38.6% vs CMP

Target Range

₹514 – ₹850

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

2 mixed4 general

M M Forgings (NSEI:MMFL) Stock Forecast & Analyst Predictions

Simply Wall Street, 09 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

MM Forgings Releases Q3FY26 Conference Call Transcript with FY27 Growth Outlook

scanx.trade, 13 Oct

MM Forgings vs Nifty 50: Share Price Performance Compared

Univest, 07 Oct

Buy MM Forgings; target of Rs 840: Anand Rathi

Moneycontrol.com, 19 Aug

MMFL Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Capex, better mix to drive margins; Anand Rathi retains Buy on MM Forgings

Business Standard, 18 Feb

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

MiddlingBusiness Quality · Financial Health · Profitability · Valuation · Risk

WeakGrowth

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑