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MM Forging (MMF): Reports steady Q2FY22 results

News: MMF's standalone revenues increased by 9.2% sequentially in Q2FY22 to Rs.261.3 crore with margins at 18.2%, up 10 bps QoQ. Consequently, consolidated profit at Rs.27.7 crore was higher by 16.2% QoQ.

Views: The company's performance was steady with revenue growth coming lower than expectations. Profitability, however, sustained at 18%+ EBITDA margins despite sharp contraction in gross margins (210 bps) on account of tight control over other expenses. Lower inventories and trade receivables helped MMF post Rs.93 crore CFO in H1FY22 vs. Rs.10 crore in FY21. The company remains a key beneficiary of cyclical recovery underway in the domestic as well as global commercial vehicle segment.