MM Forgings: Analyst Upbeat, But Debt and Quality Raise Flags

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AuthorSimar Singh|Published at:
MM Forgings: Analyst Upbeat, But Debt and Quality Raise Flags
Overview

MM Forgings (MMFL) sees optimism from Anand Rathi, who maintains a BUY rating and raises the price target, citing projected revenue growth and an attractive valuation supported by the commercial vehicle sector's recovery. However, the company faces headwinds from a recent quality grade downgrade, increasing debt levels, and mixed historical revenue performance, demanding careful investor consideration amid sector tailwinds.

### Growth Catalysts and Analyst Optimism

Anand Rathi has reiterated its BUY recommendation for MM Forgings (MMFL), significantly increasing the price target to ₹600 from ₹430, valuing the company at 16 times its FY28 earnings. This bullish stance is anchored on projected revenue and EBITDA compound annual growth rates of 13% and 18% respectively, between FY26 and FY28. The firm anticipates a revival in domestic Medium and Heavy Commercial Vehicle (M&HCV) volumes, forecasting a 7% CAGR driven by economic improvements, enhanced replacement demand, and the benefits of GST reforms. Furthermore, a rebound in the overseas CV sector is expected in FY27-28, buoyed by a low base and preemptive purchases before new emission norms take effect. MM Forgings is also positioned to achieve growth exceeding industry averages through new orders, product development, and an increasing contribution from higher-margin machining and heavy forging components. At its current trading price, the stock is noted to be trading at a discount to its one-year forward average, presenting an appealing entry point for investors. The current market capitalization stands around ₹2,213 crore. As of mid-February 2026, MM Forgings shares are trading in the ₹440-₹460 range.

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