M M Forgings Q1 FY27 Results (NSE: MMFL)
Signal: Steady quarter
The read
The operating trajectory is positive but not yet a clean earnings inflection: consolidated revenue grew 13.3% YoY and EBITDA 14.3%, while gross margin compressed approximately 405bps; the 371.2% PAT growth is primarily exceptional-item-led, with ₹5,625.20 lakh of exceptional income against ₹3,417.24 lakh pre-exceptional profit.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹409.9 Cr | 13.3% | -4.5% |
| EBIT | ₹51.34 Cr | 11.6% | |
| Net profit | ₹90.42 Cr | 371.2% | |
| EPS | ₹18.73 | 371.8% | |
| EBIT margin | 19.8% |
P&L walk
Consolidated revenue increased 13.3% YoY to ₹40,989.63 lakh, but gross margin compressed by approximately 405bps as material cost rose to 41.74% of revenue from 45.19%?
Key positives
- Consolidated revenue reached ₹40,989.63 lakh, up 13.3% YoY, and standalone revenue grew faster at 17.3% to ₹40,911.47 lakh.
- EBITDA increased 14.3% YoY to ₹81.22 crore, ahead of the 13.3% consolidated revenue growth, while finance cost declined 11.1% YoY to ₹1,626.90 lakh.
- EPS of ₹18.73 tracked PAT growth of 371.2%, with no dilution indication from the equal basic and diluted EPS.
Key concerns
- Gross margin compressed approximately 405bps YoY to 42.24% as material consumed plus inventory change increased to 42.24% of revenue; the filing does not disclose the cause.
- Employee costs rose 27.0% YoY and power and fuel costs rose 24.7%, both faster than consolidated revenue growth of 13.3%.
- Reported PAT of ₹9,042.45 lakh includes a ₹5,625.20 lakh exceptional item, so recurring profit was only ₹3,417.24 lakh.
Earnings quality: includes an exceptional item
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