M M Forgings Q1 FY27 Earnings Call — Analysis (NSE: MMFL)
MM Forgings delivered 16% YoY revenue growth in Q1 FY27 with machining mix rising to 67%, while guiding for FY27 revenues of ₹1,800–1,900 Cr and sales volume exceeding 90,000 tonnes.
Result quality: stable — Steady quarter. Management sentiment: optimistic.
The take
Q1FY27 EBITDA (ex-other income) ₹75 Cr ( +16% YoY ) . New guidance — FY27 fy27 revenue ₹1,800 Cr to ₹1,900 Cr . New story: Value-added machining shift .
Results
Net sales grew 15.7% YoY to ₹427 Cr; EBITDA (excluding other income) stood at ₹75 Cr (18% margin, +16% YoY); PBT rose 30% YoY excluding a ₹58 Cr net gain on Oragadam land sale.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Net Sales | ₹427 Cr | +15.7% | yoy · Q1FY27 · vs ₹369 Cr in Q1FY26 |
| EBITDA (ex-other income) | ₹75 Cr | +16% | yoy · Q1FY27 |
| EBITDA Margin (ex-other income) | 18.0% | none · Q1FY27 · 19% including other income | |
| Sales Realization per Ton | ₹0.02 Cr | +4.66% | sequential · Q1FY27 · ₹2.02 lakhs vs ₹1.93 lakhs in Q4FY26 |
| Gross Debt | ₹750 Cr | point_in_time · Q1FY27 · Jun-26 |
Guidance
FY27 revenue guided at ₹1,800–1,900 Cr (~18% growth) on sales volumes exceeding 90,000 tonnes, with EBITDA margin expansion target of 20%+.
What management committed to
- [MM Forgings] expects turnover in the region of around INR1,800 crores to INR1,900 crores for FY27. — INR1,800 crores to INR1,900 crores, FY27
- [MM Forgings] expects to cross the 90,000 ton mark in sales volume for FY27 and challenge 1,00,000 to 1,10,000 tons in FY28. — cross 90,000 ton mark, FY27
- [MM Forgings] 16,500 ton press will go into production by end of this fiscal, in Q4 [FY27]. — Q4FY27
- [MM Forgings] machining mix should hover in the 65% to 68% range for the rest of [FY27]. — 65% to 68%, FY27
- [MM Forgings] capex will be approximately INR150 crores for FY27, with gross debt held around INR750 to INR800 crores. — INR150-odd crores capex, INR750-800 crores debt, FY27
- [MM Forgings] still looks to reach INR3,000 crores in revenue by FY30. — INR3,000 crores, FY30
Key themes
Machining mix ramp and volume recovery
How the narrative shifted
- Value-added machining shift: Management is aggressively driving value-add by raising the proportion of machined parts to 67%, boosting realisations and insulating margins.
- Global supply chain realignment: Global OEMs in the US and Europe are relocating forging procurement to low-cost countries like India due to structural labor and cost pressures abroad.
- Asset debottlenecking and automation: Focusing on debottlenecking existing press lines and ramping robotics/automation to expand EBITDA margins towards 20%+.
- Working capital and inventory rationalisation: Tackling elevated working capital by leveraging AI tools to flush out WIP inventory and convert it into dispatches.
Operational commentary
- Machining mix reached 67% of total sales, supported by cumulative capex of ₹625 Cr in the last 5 years on machining capacity.
- New 4,000-ton press commissioned in early Q2 FY27; 16,500-ton heavy press scheduled to begin commercial production in Q4 FY27.
- Sales volume stood at 20,200 tonnes in Q1 FY27, with management targeting 23,000–25,000 tonnes per quarter from Q2 FY27 onwards.
- EV subsidiary Abhinava Rizel commenced initial SOP/sampling ramp-up with its first customer win.
- Freight costs rose due to West Asian shipping disruptions around the Strait of Hormuz, inflating export logistics expenses by ₹4 Cr.
Analyst Q&A
Q. Machining capacity quantification and run-rate sustainability.
Management confirmed that 65-68% machining mix will sustain, but admitted they currently lack a standardized metric to quantify total machining capacity in tonnes/numbers due to product complexity, committing to develop a method in coming months.
Q. Update on Abhinava Rizel EV business pipeline and customer additions.
Confirmed receipt of the first commercial business order and transition into initial SOP/ramp-up stage for EV components across 4-wheeler domestic and export platforms.
Q. Gross debt reduction and utilization of ₹58 Cr land sale proceeds.
Gross debt will remain range-bound at ₹750–800 Cr because ₹170 Cr of annual repayments will be matched by ₹150 Cr capex drawdowns; land sale proceeds will support working capital and debt servicing.
Q. Why European revenues declined sequentially despite talk of European forge closures.
Europe is stable but cyclical with fluctuating customer schedules, though no business has been lost and long-term offshoring trends from high-cost regions remain intact.
Research and educational content only. Not investment advice.