M M Forgings, engaged in the manufacture and sale of iron and steel forgings in India, on consolidated basis, reported a net profit of 1015.03% to Rs 341.2 million for the quarter ended March 2021 as against Rs 30.6 million in the corresponding period last year.
Net Sales rose 76.83% to Rs 2,925.2 million in the quarter ended March 2021 as against Rs 1,654.2 million during the previous quarter ended March 2020.
For the full year, the company's consolidated net profit rose 11.43% to Rs 467.1 million in the year ended March 2021 as against Rs 419.2 million during the previous year ended March 2020.
Net Sales declined 1.64% to Rs 7,299.5 million in the year ended March 2021 as against Rs 7,421.3 million during the previous year ended March 2020.
The Board of Directors has declared an interim dividend of 50% (Rs. 5 per equity share).
Commenting on the result review, IDBI Capital said, "MM Forgings (MMFG) Q4FY21 result was ahead of our estimates on all parameters. EBITDA margin stood at 19.8% vs our estimates of 16.1% due to lower operating expenses.
Currently revenue contribution from export market for MMFG is ~52% whereas NA/European contributes ~20%/22% respectively. We believe NA/European market to recover strongly on the back of strong GDP growth forecast. On Domestic front, we expect domestic CV industry to grow in double digit from multiyear low base due to higher push in Infrastructure and construction activity by Govt.
We raise our revenue/EBITDA estimates by 7%/5% and 8%/2% for FY22/FY23 factoring the stronger recovery from domestic PV/CV segment and export markets like Europe/NA region. We expect revenue/earnings to grow at 25%/26% CAGR over FY21-FY23E with EBITDA margin of ~19%.
We have arrived at FY23E EPS at Rs 43.3, factoring in strong recovery from export & domestic market and better tonnage/ realizations growth. Due to recent rally in share price, we change our rating to HOLD with TP of Rs 606 (earlier Rs 600) based on PER of 14x FY23E EPS."
Shares of the company gained Rs 87.30, or 14.57%, to trade at Rs 690.50. The total volume of shares traded was 14,750 at the BSE (12.58 p.m, Tuesday).
