MM Forgings Ltd Receives Reaffirmed Credit Ratings from CARE Ratings

MM Forgings Ltd Receives Reaffirmed Credit Ratings from CARE Ratings​

M M Forgings Limited received reaffirmations of its credit ratings from CARE Ratings Limited, detailing the financial facility status for the company.

The ratings assessment covered several key facilities and instruments, with the following amounts and ratings noted:


The ratings reflect the company's established track record in the auto components segment, noting its presence in both domestic and export markets, coupled with established engineering capabilities and in-house machining capacity.

Key Business Drivers and Outlook​

The rating analysis factors in the company's strong business risk profile, which has shown a stable scale in recent years with range-bound operating margins. However, the rating remains constrained by factors such as a moderate capital structure, high dependence on the cyclical automotive industry with a greater concentration in the commercial vehicle segment, client concentration risk, exposure to raw material price volatility, and the inherently capital-intensive nature of the business.

The outlook for the company is Stable, suggesting an expectation that the rated entity is likely to sustain a healthy business risk profile in the medium term.

For continued rating strength, the analysis highlighted positive factors such as a significant increase in total operating income (TOI) through increased sales in both domestic and export markets, alongside a sustained improvement in Return on Capital Employed (ROCE) exceeding 15%. Improvements in overall gearing to below 0.80x and total debt to profit before interest, lease rentals, depreciation, and taxation (PBILDT) below 3x on a sustained basis were also cited as positive triggers.

Conversely, negative factors that could impact the rating include a sharp de-growth in sales volume leading to capacity under-utilization, deterioration in overall gearing beyond 1.5x on a gross debt basis, or a significant reduction in liquid investments held by the company.

Operational and Financial Overview​

M M Forgings Limited has deep roots in the forging business, having been in the sector since 1974. The company supplies closed-die hot forgings across carbon, alloy, micro-alloy, and stainless-steel grades, utilized in applications ranging from commercial and passenger vehicles to tractors and off-highway equipment.

In the first nine months of FY26 (9MFY26), the company's operating performance was affected by geopolitical tensions, specifically tariff uncertainties in the US market, which moderated US volumes in Q2 and Q3. This led to a decline in the PBILDT margin to 17.17% in 9MFY26, compared to 19.33% in 9MFY25, due to an adverse business mix change, resulting in a reduction in machining coverage to approximately 53% from 58%.

The company's capacity stood at a combined capacity of 130,000 MT as of December 31, 2025, an increase from 110,000 MT as of December 31, 2024, reflecting expansion in forging and machining capabilities to meet demand for heavier forgings.

The financial trends for the company show the following figures:


*PBILDT: Profit before interest, lease rentals, depreciation and tax

The company's liquidity position was noted as adequate, with liquid investments and cash and bank balance aggregating ₹2 18 crore as of March 31, 2025, and utilizing an 80% fund-based working capital limit for the 12 months ending December 2025.

MMFL Stock Price Movement​

On Friday, MM Forgings Limited shares rallied, edging up 0.92% to settle near ₹444.8. The stock traded on a volume of 308,421 shares during the session, indicating investor interest across the auto components sector.

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