This is my first post on ValuePickr so all the veterans please advise, if anything is missed out to start a new discussion.
MM Forging seems to be a good story in the making.
The Company was originally started in 1946 as ‘ The Madras Motors Ltd ‘ as an importer and distributor of the products of Royal Enfield Motors from UK. The current forgings business was started in 1974 and later stopped the dealership of Royal Enfield in 1990 and decided to concentrate solely in forgings production. (Focus in one domain)
MMFL now producing forgings mainly for auto , engineering and oil industries . The Company has increased its forging capacity step by step and now operating four factories in Tamil Nadu. The Company is one of the largest forgings exporter from India and more than 70 % of total income is currently coming from exports.
Below chart clearly shows good signs of dividend and two time bonus of 1:1 clearly indicates shareholder friendly Company practices across 15 years of time span:
In my opinion, following are the positives:
1) Good Cash sitting in balance sheet for current year;
2) Sales and Net profit has almost doubled in 5 years; and
3) Profitability ratios in mid teens year on year and improving.
In my opinion the following are concerns:
1) Volume of shares traded – But I think for small cap that will always remain a question; and
2) Debt has increased year on year.
CMP around 520, 52 week high @ 751, 52 week low @ 421
Discl: Not invested yet but seeing the growth prospect coupled with Shareholder friendly practices tempted to invest.
Veterans – Please share your opinions.
Regards,
Gaurav
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