MM Forgings MD Vidyashankar Krishnan Expects 20% Ebitda Margin To Sustain In FY25
With new products launches, the company's export revenue will be in the range of 38–40%, he said.
The Ebitda margins of steel forgings company MM Forgings Ltd. have shown a healthy improvement, and the management is hopeful to sustain the levels towards the end of the current financial year.
MM Forgings, in the first quarter, reported an Ebitda margin of 19.1%, up from 17.4% in the same quarter a year ago.
Speaking to NDTV Profit, Vidyashankar Krishnan, vice chairman and managing director of MM Forgings, said that the margins are on track.
"We see this quarter past was rather range-bound and as we are aware, both revenue and net profit are up at about 3%. Ebitda margins have improved from 17.4% to 19.1%, showing a very healthy improvement."
He added, "We see this 20% mark to be sustainable; 19.4% should grow close to 20% or about 20% and should be sustainable at those levels."
MM Forgings will reach its revenue target of Rs 5,000 crore within the next three years, according to Krishnan. “We have a Rs 2,500-crore revenue mark first in our sight and that would depend upon markets largely. We have most of the products developed and the final round of products is being launched right now. So, depending upon volume growth in markets, we should first see a Rs 2,000-crore revenue, then Rs 2,500 crore and Rs 5,000 crore—all, within the next two to three years.”
The top executive said that the company is focusing quite a bit on the heavy forgings division over the last few years. "We have procured a 16,500 tonne hot forging press—the largest of its kind in the world. Commercial production will start within the next 12–15 months, somewhere in H1 of FY26. This press will enable us to produce forgings in the region of 150–250 kg. We will produce front axle beams, crankshafts and some railway products. This will launch us into the biggest league of forgings that are produced on mechanical presses globally.”
Even though exports are sluggish, the company’s new products will enable it to maintain the revenues in the sector. “We would expect exports to be range bound as global markets are sluggish, and the rest of CY24 is expected to be so. However, with new products coming in, we would be range bound and export revenue will be in the range of 38–40%,” the MM Forgings vice chairman added.
