MM Forgings Limited, a leading forging company, reported a decline in revenue for the second quarter of fiscal year 2026, primarily due to inventory buildup at US customers and a slowdown in the Class VIII truck market. However, the company expects a recovery in the coming months and aims to maintain its annual revenue.

Q2 FY26 Financial Highlights

MM Forgings achieved a turnover of INR 758.00 crores in Q2 FY26, compared to INR 793.00 crores in the same period last year. The company's EBITDA also saw a decline, dropping to INR 142.00 crores from INR 162.00 crores in the previous year.

Market Challenges and Recovery Expectations

The company attributed the revenue decline to two main factors:

1. Inventory buildup at US customers
2. Slowdown in the Class VIII truck market

Despite these challenges, MM Forgings expects a recovery starting from November 2025. The company anticipates US customers to restart purchases, targeting a revenue of INR 750.00-800.00 crores in the second half of FY26.

Expansion and Future Outlook

MM Forgings is set to commission a 16,500-ton press by March 2026, which could potentially add INR 300.00 crores in annual revenue from FY27 onwards. This expansion is part of the company's strategy to enhance its production capabilities and address new market segments.

Vidyashankar Krishnan, Chairman and Managing Director of MM Forgings, stated, "We expect our sales to grow by at least INR 300.00 crores in the next 15 to 18 months, assuming that things don't bottom out further."

Debt Management and Financial Strategy

The company reported a net debt of approximately INR 855.00 crores as of Q2 FY26. Management indicated that they consider this to be near peak debt levels for the current scale of operations. MM Forgings plans to focus on debt management and potentially explore options for equity infusion in the future, although this remains an outlier consideration at present.

Conclusion

While MM Forgings faces short-term challenges due to market conditions, particularly in the US, the company remains optimistic about its recovery and growth prospects. With strategic expansions and a focus on financial prudence, MM Forgings aims to navigate the current market volatility and position itself for future growth opportunities.

MM Forgings Limited, a prominent player in the forging industry, has released its unaudited financial results for the third quarter ended December 31, 2019, showcasing a mixed performance with steady revenue and a decline in profitability.

Standalone Performance

On a standalone basis, MM Forgings reported net sales of ₹241.83 crores for the quarter, demonstrating the company's ability to maintain its revenue stream in a challenging market environment. The net profit for the period stood at ₹11.25 crores, resulting in earnings per share (EPS) of ₹4.66.

Consolidated Results

The consolidated financial results, which include the performance of the company's subsidiary DVS Industries Private Limited, paint a slightly more positive picture:

• Quarterly net sales: ₹246.85 crores
• Quarterly net profit: ₹11.32 crores

Nine-Month Performance

For the nine-month period ending December 31, 2019, MM Forgings showcased the following results:

The consolidated figures indicate a stronger performance, particularly in terms of profitability, when compared to the standalone results.

Financial Analysis

While the company has managed to maintain relatively stable revenue figures, there are signs of pressure on profitability. The quarterly net profit of ₹11.25 crores on a standalone basis suggests a challenging operating environment, possibly due to factors such as increased competition, raw material costs, or market dynamics affecting the forging industry.

The consolidated results show a marginal improvement in both revenue and profit figures compared to the standalone performance, indicating that the subsidiary, DVS Industries Private Limited, has contributed positively to the overall group performance.

Conclusion

MM Forgings' Q3 FY2020 results reflect a company navigating through a complex market landscape. While revenue has remained relatively steady, the pressure on profitability is evident. The company's ability to maintain its sales figures in a challenging environment is noteworthy, but investors and stakeholders will likely be watching closely to see how MM Forgings addresses the profitability concerns in the coming quarters.

The company has stated that these results will be published on its website and stock exchanges, providing transparency for investors and the public.