Saturday, June 28, 2014

M.M.FORGINGS LTD - BUY



 
    
Recently many companies from Auto and Auto ancillary space reported decent  gain in anticipation of a revival in demand scenario. Even after such a run up ,some quality companies still available at attractive valuation . This week let us look into one such company – MM Forging ( MMFL).

MM Forging originally started operations as ‘ The Madras Motors Ltd ‘ in 1946 as an importer and distributor of the products of Royal Enfield Motors from UK.Company started manufacturing of forgings in 1974 and later stopped the dealership of Royal Enfield in 1990 and decided to concentrate solely in forgings production.MMFL now producing forgings mainly for auto , engineering and oil industries .Company increased its forging capacity step by step and now operating four factories in Tamilnadu.Company’s product line also expanded and it is now capable produce forgings  varies from 0.20 Kg to 60 Kg in more than 475 categories.Company is one of the largest forgings exporter from India and more than  70 % of total income coming from exports. Foreign auto majors like .Company/s marque clients includes Chrysler Group  ,Ford, GM ,Ashok Leyland  ,TAFE,BEML,BHEL ..etc. MMFL also owns two wind farms one each at Muppandal in Tirunelveli District and other at Meenakshipuram at , Theni District  both in Tamilnadu. Electricity from these units are using for captive consumption and close to 50 % of company’s total electricity requirements are meeting from these wind farms. This is very critical for a company operating all factories in a state like Tamilnadu where power shortage is a big issue.
Amid severe recession in auto sector both in overseas market and local market ,company’s performance was  reasonably good.In last five years MMFL’s top line grown from Rs.215 Cr to Rs.411 Cr and its last year profit was Rs.29 Cr with an EPS of Rs.24 .Promoters are holding close to 60 % stake without any pledge. Company is liberal in dividend distribution and in the case of bonus shares too. Company has given 1:1 bonus two times in last 9 years.
Since MMFL is mainly selling products in export market ,appreciation of INR may slightly affect its margin.But  I believe,revival in US and EU economy and their auto sector will help the company to increase its volume and thus mitigate the effect in profit to a great extent.Once Indian auto sector starts to improve ,company can gain from its already created extra production capacities.All together ,a  good company from auto related sector available at a decent valuation with P/E multiple of just 7 where its largest peer Bharat Forge is trading with a P/E close to 30 . Recommending to BUY and HOLD for long term @ CMP of Rs.187 .Stock listed in both exchanges.

 Link to Company Website HERE


Disc: It is safe to assume that I  have vested interest in MMFL

112 comments :

  1. Sir your views on Page Industries, Eicher Motors and SML Isuzu please

    ReplyDelete
    Replies
    1. Sie kindly reply the question

      Delete
    2. SML recommended at half of the current price ,One can still hold it ,Link below

      http://value-picks.blogspot.in/2011/04/sml-isuzu-double-impact.html


      Not tracking the rest

      Delete
  2. Sir i buy suzlon energy ltd at 28.00 what should i do can i hold

    ReplyDelete
    Replies
    1. Harsh,

      Please read old comments/reply of VP on recent posts.If I am not wrong VP had already mentioned HOLD/BUY 2-3 times in last 1 month. Patience is the key.

      PS : In general for other readers Whatever VP suggest he suggest for long not for week or month so asking same question after every 10-15 days wont be useful. If you have any question on any stocks please use search box on the right side and you can see his replies/update if there is any and I am sure in most of the cases you will get your ans.

      Delete
  3. Sir pl share ur valuable opinion on HFCL n Finolex pipes.....
    Also Thnx for today's pick.

    ReplyDelete
  4. Dear Sir,
    I am invested in Caplin pint lab at 122/= Your views please as to add more or hold on for longer time?Thanks.

    ReplyDelete
    Replies
    1. Dude,

      Did you try using the search box on the right side.Search caplin on the right side and get your ans.
      PS : Always use search box first.

      Delete
  5. Is it a buy call on Deepak Nitrate in current levels?

    ReplyDelete
    Replies
    1. Stock recommended before stock split and bonus and already appreciated 5 times

      Delete
  6. Dear VP Ji,


    Good Morning... and thank for your valuable picks...

    I am salaried employee. I am planning to invest in small amount from my monthly salary for long term to my future financial security. You had said one of your post, “It is good to invest when price are low”. Kindly suggest me some good low price companies for long term investment.

    I am waiting for your valuable reply.....

    Have nice day..............


    Amitsingh

    ReplyDelete
    Replies
    1. Low price never means less market price alone , It depends on the market price and its worth . Sometimes a stock priced @ Rs.1000 may be cheaper than another stock priced @ Rs.100,it should be treated as a relative term connected with its value.

      My stock ideas are suggesting through this blog.Study it and decide if it is suitable for your risk profile .It is practically difficult to suggest stocks to a one to one basis.

      Delete
    2. Thank you VP Ji,

      I will study...

      Delete
  7. Ahmednagar Forgings also seems to be a good buy. Your thoughts on that.

    ReplyDelete
    Replies
    1. Ahmednagar is a company with Rs.2000 Cr debt and a D/E ratio of more than 2 ,where MMF's debt is close to Rs.100 Cr and D/E ratio is close to 0.5

      Decide yourself ..

      Delete
  8. Thanks a lot
    Sir your views on Veer Energy and Infrastructure please

    ReplyDelete
    Replies
    1. Reply given to kiran dsouza below previous posting is applicable to this stock too

      Delete
  9. Sir can I invest in ISGEC heavy Eng at this price of 2300.

    ReplyDelete
    Replies
    1. Good stock for genuine long term investors.

      Delete
  10. dear sir
    JETAIRWAY ,60% forien promot, it can b MULTIBAGAR? sirji what is view anytime re-retaing story in alivation sector.

    ReplyDelete
    Replies
    1. Wait for clarity in govt policies wrt aviation sector..VP already told...

      Delete
    2. Not positive as of now in this sector

      Delete
  11. Hi,

    Please if you could track TV Today network and Venus Remedies for investment potential and help us with your valued comments on both.

    ReplyDelete
    Replies
    1. VP already expressed his views that he is bit skeptic abt TV today promoters..

      Delete
    2. I have not expressed such an opinion about TV Today promoters but about TV 18 ,before the change of ownership of that company.TV Today is one of the better stocks from media sector.

      Delete
    3. plz excuse, I got confused between TV 18 & TV Today...
      as I heard TV18 is taken over by Reliance now...r u still skeptic abt the group or now its fine...

      Delete
    4. I don't think ,only because of a promoter with deep pocket can win in this type of business. One need to wait and see.

      Delete
  12. Respected VP Sir, i would like you to tell me whether i should hold on to INDIA BULLS HOUSING FINANCE or switch to a better housing finance company at this point in time?.. PLEASE REPLY TO MY QUESTION

    ReplyDelete
    Replies
    1. Not tracking any stocks from Indiabulls group.

      Delete
  13. Hello Sir,

    I can see the upper limit set for few stocks are only 2 %.. How they are setting the upper and lower limits. When the limit will be changed.(After how much time period).. This is a general question and expecting your response. Thanks a lot for all your hard and help.. God bless you sir.

    Thanks,
    Prabu

    ReplyDelete
    Replies
    1. Read the below link for details

      http://www.bseindia.com/markets/equity/EQReports/sur_Price_monitoring.aspx?expandable=6

      Delete
  14. sir your view on gol offshore plz

    ReplyDelete
  15. Dear VP sir
    Would request your views on Narmada Gelatines. Looks to be a debt free, small cap with positive cash flows. Gelatines being a product with widespread use across multiple sectors and the Chinese imports might get banned due to high chromium content might act as a trigger for increased domestic sourcing? Thanks Shankar

    ReplyDelete
    Replies
    1. Narmada Gel 's current price is above Rs.250 ,stock already recommended @ just Rs.93

      http://value-picks.blogspot.in/2011/06/narmada-gelatine-value-pick.html

      One can HOLD it

      Delete
  16. Vp sir your views on oriental carbon pls

    ReplyDelete
    Replies
    1. Stock recommended @ Rs.93 .At current price of Rs.269 .One can hold it

      Old link below

      http://value-picks.blogspot.in/2010/03/oriental-carbon-and-chemicals.html

      Delete
  17. Dear VP sir, I just want to thank you for ur valuable insights. God bless you !!!

    ReplyDelete
  18. Your views on Talwalkars and Speciality Restaurants please

    ReplyDelete
    Replies
    1. Both cos are not bad but these are spending related themes and re rate once there is more money in the pockets of public.

      Delete
  19. VP sir, request u to name 5 blue chip cos which u believe eligible to add in core portfolio...m not asking d entry level just names so that I can start tracking them for future..
    Thanks.. God bless u

    ReplyDelete
    Replies
    1. Every second person is tracking blue chips and lot of advices and opinions are available.Frankly speaking I am not tracking much bluechips ,trying to find out future blue chips.

      Delete
    2. Excellent reply "trying to find out future blue chips":)

      Delete
  20. Sir I have repeatledy asked this question but I haven't got any reply .. And its a serious issue for everyone in the country ..
    What is the impact of high crude oil prices and 50% (expected, can be lower also ) rainfall on the share market and overall economy ??
    Should we stop investing money in the markets now as we all have made money and stay aside for a while and look into the markets after a year and half ..
    I stay in Pune (Maharashtra )and we are facing a serious fraught problem ..

    ReplyDelete
    Replies
    1. India's growth story is more prominent than such cyclical issue....my personal opinion..

      Delete
  21. It is a serious issue but don't think only you and me are smart in the entire market .Most of the market participants are aware about this and to a great extent it already discounted in market.There was similar situation few years back and then the index was lower than current level. These type macro factors will come and go and there is opportunity in every crisis in market . Select suitable stocks according to the situation .

    ReplyDelete
  22. Sir i am holding 2000 shares of asian granito tiles bought at the rate of 63.40/-. Should i hold on this stock for long term or book partial profit? What do you expect from Q1 f.y 15 results?

    ReplyDelete
  23. sir, your stocks are rocking today?
    Rahul baba

    ReplyDelete
  24. Hi VPji,
    I would like to thank you for recommending so many good stocks. I am planning to buy shares from NRB Bearings, HDIL, Gokaldas exports. Please provide your comments. It will be valuable for me. God bless.

    Thanks
    Shiva Sundaram

    ReplyDelete
  25. Hello VP Sir,
    I had posted this question few days back however it couldn't get published. I am asking again -

    Do you suggest one can enter Astra Microwave Products at current level (127/-) ?
    Also do you have any suggestion for Oil and Gas sector (for Mid/Smaal Cap segment) as govt is keen to bring some reforms. Please do share your views on these.

    Thanks,
    Ramesh

    ReplyDelete
  26. sir ur views on OnMobile Global, its one of ur earlier recommendation.

    ReplyDelete
    Replies
    1. I think you are aware about the management related issues happened in Onmobile post recommendation . Original Promoter exited from the company and now run by a board under professional team .There is lot of uncertainty in telecom sector and hence this stock is now suitable for investors with above average risk.

      Delete
  27. Dear VP,

    As usual, your stock rocked today, again I could not win this race, let me try my luck in these coming days...

    I have been reading your blog and tracked all your previous recommendation... all got rocked from the day after your recommendation...

    From this blog followers comments of 30 persons, it may be thought some lesser persons are reading..

    But it is very fact, there are unknown huge followers you have which can be seen the very next day of your stock recommendation..

    Ofcourse I knew you will not accept your blog is making influence in share market.. it is a true whether you can accept it or not.. your stock has influence in share market.....

    Congratulations... wish you to continue....


    ReplyDelete
    Replies
    1. Dear Prabhu

      I am nothing in this market ,still in the stage of learning.Only small thing I am doing is just presenting some unknown stocks to my readers which I believe having potential in future . I request my readers to study deep about it and take decision if you find there is some facts in it and if not just ignore it . In this big ocean I am less than a single drop.

      Delete
    2. Dear VP, u might not b aware BT there r huge enthusiasm in small group of youngsters like us who follow our blog on daily basis, discuss n emerging in share market as smallest retail investors with right perspective of wealth creation in long run & not quick money making shortcuts..
      God bless u, our country needs ppl like u..

      Delete
    3. Dear

      I also lost lot of amount in stock market when I enter in it about 20-25 years back.At that time no internet and lot of limitations for collecting information. Now we have facility to know everything as soon as it happened around the world .But unfortunately even such facilities , still our young investors considering stock market is a place to make quick money and the image of stock market participants out side this community is like gamblers .It is really sad to see such a situation . Actually we have many opportunities to create wealth by investing in good companies but we should work hard as in any other business. Never jump into it without proper study ,one should at least know what he is buying and who is the promoter ..etc . To share such info is the major purpose of this efforts. I know the feeling of a looser very well because I lost lot in the initial years because of my ignorance.

      Delete
  28. Dear VP...even after multiple attempts, i am not able see my question being posted and niether answered..re-posting my question -

    Do you suggest to buy Astra Microwave Products Ltd at current level (128) and also which stocks do you thik are good to be part of portfolio in Oil and Gas sector as the new govt seems to be committed to reform in coming time....please do suggest.

    Thanks
    Ramesh

    ReplyDelete
  29. Dear VP sir
    i have just tracked your site last day only and become the fan of yours........sir i requested of your views on suzlon energy, lanco infra, dishman pharma, Gabriel ind, renuka sugar and rana sugar .............plzzz sir guide me plzzz

    ReplyDelete
  30. Cant imagine how much money VP sir is making every week .. My hat's off to you :)

    ReplyDelete
    Replies
    1. Dear Remil

      Seeing my disclosure ,don't think I am holding huge quantity of each of the recommended stocks. Sometimes it is small as 100 shares purchased to keep academic interest in a company and for tracking purpose. My pocket is not deep to buy everything I like in huge quantity.More than everything it is better to keep holdings with good conviction for long term than churning portfolio frequently .

      Delete
    2. On Remil,

      I don't think it is fair to make comment on the person who is doing selfless service to us.

      Thank you VP sir for enlightening us with your knowledge!

      Delete
    3. No, I'm with Remil...he must b a youngster like me & has expressed his curiosity in friendly manner...
      Nothing wrong in imagining huge profits, after all we all came to make money in d market.. & keeping VP as ur roll model with right perspective is d best u can do..
      All the best Remil..
      God bless VP

      Delete
    4. Dear VP sir , Please take it as a token of appreciation…God bless you :)

      Delete
    5. I think the first stage in learning is: focus on own competence and wealth; if we start focusing on what money the creator of blog is making rather than what knowledge he is sharing (and the hard work he is putting to do the research), then it might be called "jealousy and greed" instead of curiosity....and create a society in which people see progress 'relative' rather than 'absolute' by encouraging such attributes in youngsters! (which we assumed Remil is); my friendly view.

      Appreciate the attitude of forgiveness for him though:)

      Delete
  31. Sir, your search gives only the topics not your comments. I want to know the current stance on SUZLON. Pls help how to get that or pls advise to this query. Thanks and sorry If I had disturbed with repeated queries from readers. Thanks

    ReplyDelete
    Replies
    1. Positive on Suzlon.Investors with enough patience and plan to long term investment may enter even at current rate.Not for people looking into trading screen everyday.

      Delete
  32. Please give me you view on Somi Conveyor Beltings - many thanks

    ReplyDelete
  33. sir, How does MAZDA looks to you

    ReplyDelete
    Replies
    1. Mazda recommended @ Rs.98 ,at CMP of Rs.196,one can HOLD

      http://value-picks.blogspot.in/2010/03/mazda-ltd-another-value-pick.html

      Delete
  34. Dear sir you said this mm forgings is listing in both nse and bse, but its not trading in eq,be, bt , may i know why what is the reason

    ReplyDelete
    Replies
    1. This may be due to some technical issue at your side .Stock trading in both exchanges without any issue.

      Delete
  35. Sir, Do you provide paid services? I would like to subscribe.

    Thanks

    ReplyDelete
  36. Hi Sir,
    I am holding Responsive Industries 1000 shares @112/-. Let me know your view on that stock.

    Thanks

    ReplyDelete
    Replies
    1. What is special in Responsive ind to trade @ a market cap of Rs.1975 Cr ? .I could not find anything .

      Delete
  37. Vp Sir

    Whats your view on UFLEX and MOIL both trading in extremely low p/e and book value.

    ReplyDelete
    Replies
    1. Skeptical about the promoters of Uflex group ,positive on MOIL for long term

      Delete
    2. Dear VP sir, how can we judge whether promoters are good/bad?

      Delete
  38. Dear VP sir,

    Any idea about Butterfly Gandhimathi, @ 300, other peers like TTK prestige and Hawkins have zoomed.

    Your advise will be appreciated.

    Thanks.

    ReplyDelete
    Replies
    1. Can;t say like that ,myself recommended Butterfly Gandhimathi @ Rs.78 which is currently @ Rs 300

      http://value-picks.blogspot.in/2010/08/gandhimathi-appliances-opportunities.html

      Delete
  39. Dear VP , Can u please put thoughts on portfolio allocation. 1: with so many ideas how much do u allot to a single idea? 2: Money being a finite resource how do u choose to allocate between your ideas ?

    ReplyDelete
    Replies
    1. This depends on your risk apetite.
      I would say max 15% and 3% min of your capital into 1 stock

      Delete
    2. It depends on your conviction in a company.

      Delete
    3. hi ,
      You need to add a like button on to your website

      Delete
  40. Sir, by any chance are you tracking NBCC? If so, what are your views on it at CMP of Rs. 372?

    ReplyDelete
    Replies
    1. NBCC is a good stock but not a value pick -- add on dips

      Delete
    2. NBCC recommended @ Rs.95 in the below link ,@ CMP Rs.372 neutral on it

      http://value-picks.blogspot.in/2012/04/national-buildings-construction.html

      Delete
  41. Dear VP Sir, MMFL as zoomed nearly 35% after your recommendation...I am sure its a longterm stock...Do you think it will correct from its current levels..I am not sure whether to buy at current levels or wait for a correction!! your suggestion would be much appreciated..

    ReplyDelete
    Replies
    1. Correction in any stock is part of healthy up move . Movement without correction will not sustain .

      Delete
    2. VP sir you just recommended the shares and we appreciate it very well but is there any target for MMFL so that we could sell at right time.

      Delete
    3. Hi Pramod....as per VP...sell the share at time where you lose your conviction....the guys here are for investment and not tarding.

      Delete
  42. Hi VP Sir,
    There are lot of us who visits your suggestive blogs and gained from the stock market. I am following your blog for last three/four months and seen the respect of people towards you. We all are learning a lot from your blog and moreover it is not creating the monetary wealth but also we have started the tendency of picking up the prospects from a bunch. I respect your business acumen and the knowledge sharing policy.
    I wish you a very happy and healthy life.
    Regards,
    Rashi.

    ReplyDelete
  43. Sir, kindly share your views on IDFC.

    ReplyDelete
    Replies
    1. I think value unlocking for this stock will take about 2 years. Patience is the key in this stock but very good stock for long term as it will be called as bank in coming years.

      Delete
  44. I completely agree with Rashi and I am also following your blogs since 3 months. Earlier I used to invest without any logic. But now I am able to apply some logic and understand the value in stocks. Thank you for passing on this knowledge and may God bless you!!!

    ReplyDelete
  45. Dear VP...any idea why my posts are not gtting published ?

    Thanks,
    Ramesh

    ReplyDelete
    Replies
    1. It is practically difficult to post every message mainly due to time constraint .Mainly ,if a question regarding same company answered in recent times ,such questions will be avoided .

      Delete
    2. I understand your situation and definitely appreciate that you are taking your personal time to respond to the queries and you don't charge for it...it's really great of you. The reason i was asking about the same scrips that you already analyzed because i missed a buy when these were recommended as everyday most of these hit the upper circuit and by the time i finally see a possibility to buy, the stock has moved further...I missed Astra Microwave and wanted to check if i could enter now....sorry if i have been repetitive.

      Thanks,
      Ramesh

      Delete
  46. Request you to look at dolphin offshore

    ReplyDelete
    Replies
    1. Recommended @ Rs.84

      http://value-picks.blogspot.in/2012/03/normal-0-false-false-false-en-us-x-none.html


      Delete
  47. Raj from Saudi ArabiaJuly 2, 2014 at 3:31 PM

    VP simply great, He is doing great job! I was also a looser might be in crores from 2000 to 2010 as a day trader. After that I never turned up to market , but accationaly I came across this blog. I missed this blog from 2007. If I could, i may made crores. But past is past , and also my sincere advice to all don't do trading in stock market, follow VP and invest atleast for years to multiply your hard earnings.My friend told me when I discussed abut VP , don't simply go behing these free blogs. They boost stocks after their purchase and top up on your head with their margin . Then I displayed him VP recomendation from 2007 and proved him this not the cheating blog. He is also much convinced. VP wish you long live and followers best of luck including me

    ReplyDelete
  48. sir can i buy kpr mills .please reply .

    ReplyDelete
  49. sir any suggestion abt AARTI INDUSTRIES...........thnxx..

    ReplyDelete
  50. Sir, just want to convey my heart felt thanks and appreciation for your selfless service. No words can describe your generous heart.

    ReplyDelete
  51. Dear VP,
    I am curious to know your CAGR over your 25+ stock market career.
    Since you recommend many companies over a year, it should lead to a very large number of stocks in your portfolio.

    Hence I am curious to know what could be the CAGR of such large numbered stocks in a portfolio.

    Please approve this post and enlighten us with the CAGR.

    ReplyDelete
  52. Sir, your view on Hov services. Thanks

    ReplyDelete
  53. Sir I have been following your blog and immensely benefited from it thank you very much I need your opinion on bhawati auto cast, Piccadilly agro and trigyn is it good for long term holding because these three strong seems to be fairly valued but Iam not able to understand the valuations.pl suggest

    ReplyDelete
  54. Sir, I have bought Nilkamal @308 after going through your recent recommendations in the month of June 2014, The stock is in a upward momentum, I wish to hold for a period of 1 or 2 years, I want to know whether it would be prudent enough or not to hold for long.

    ReplyDelete

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