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ICICI Direct Report
MM Forgings Ltd. reported weak Q1 FY21 results in line with large volume declines both domestically and globally in key user industries, i.e. commercial vehicles and passenger vehicles, during the Covid-19 impacted quarter.
Net standalone sales were down 64.4% YoY to Rs 73 crore. Margins fell approximately 510 basis points QoQ to 9.1%, impacted by inventory adjustment.
The company posted loss at profit after tax level at Rs 5 crore for Q1 FY21.
MM Forgings has undergone a large capacity expansion and improvement programme in the recent past.
With capex spend of approximately Rs 500 crore over the last three years, production capacities have grown approximately 54% from approximately 65,000 metric tonne per annum to approximately 1 lakh metric tonne per annum at present.
The company has added heavier press lines (6,300 tons, 7,000 tons, 8,000 tons) with a view to enhance offerings (acquired capabilities to provide 60-100 kg weight products versus 2.5- 3 kg weight products earlier).
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