Broker’s Call: MM Forgings (Buy)

Target: ₹600

CMP: ₹472.50

MM Forgings reported ₹71.6 crore EBITDA in Q3FY26 (down 2 per cent year on year), broadly in line with our estimate of ₹70.6 crore. We expect its revenue/EBITDA to clock 13 per cent/18 per cent CAGR over FY26-28E, led by: Expected 7 per cent CAGR in domestic M&HCV volume over FY26-28E on improved economic activities and better replacement demand on GST reforms; likely re-bound in overseas CV sector in FY27/28E on low base and early buying before emission norms (FY27 double-digit), despite muted performance in the near term; and higher-than-industry revenue growth due to new orders, products and higher machining/heavy forging-mix.

Standalone revenue grew 11 per cent to ₹405 crore (vs our estimate of ₹376 crore) due to higher export revenue. Domestic grew 14 per cent to ₹256 crore. Exports grew 7 per cent to ₹148 crore. EBITDA fell 2 per cent to ₹71.6 crore vs. our estimate of ₹70,6 crore, due to lower-than-expected gross margin owing to adverse mix. Gross margin contracted 440 bps to 52.9 per cent. PAT fell 19 per cent to ₹25.8 crore, broadly in-line with our estimate of ₹24.9 crore.

We trim our FY26e EPS estimate by 8 per cent, due to higher depreciation/interest/tax and lower other income, but raise it by 12-16 per cent for FY27/28E, due to higher revenue and lower interest cost. Thus, we retain BUY rating on the stock with a revised TP of ₹600, valuing it at 16x FY28e EPS. . 

Published on February 18, 2026