MM Forgings (MMFL) is one of the largest exporters of forgings from India with a
capacity of 40,000MT (exports contributed ~70.0% to the revenue in FY2013). It
is engaged in the manufacturing of steel forgings, catering to the forging
requirements of almost all sections of industry including Automotive, Valve and
Oil-field, Engineering and Off Highway segments, with a focus on commercial
vehicle (CV) industry which contributed ~76.0% to the total revenue in FY2013.
The company is now focusing on improving its operational efficiencies and increasing
capacity utilization, providing the company an immense potential to grow. On account of positive growth outlook and low valuation, we initiate coverage on
the company with a Buy recommendation with a target price of Rs131 on a target
PE of 4.0x FY2016E earnings.

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