Mahindra Forgings

CMP...53

Mahindra Forgings Limited (MFL & Mahindra Forgings, India) is the fastest emerging Global Leader in Forging Business with plants in Germany, UK and India. They are an integral part of Mahindra Systech, a leading business sector of US $ 14.4 billion Mahindra Group. engaged into the manufacturing of World Class Forged and Machined products for automotive, agriculture, railway, mining, construction and other industries.

Mahindra Forgings ,India mainly focuses on design, development & machining of engine, steering and chassis components such as crankshafts, steering knuckles, stabilizer bars, gear blanks, front axle beams, levers, flanges, control arms, camshafts, connecting rods, pitman arms and piston rods and other non-automotive products for passenger cars, multi-utility vehicles (MUVs), light commercial vehicles (LCVs), medium commercial vehicles (MCVs) and tractors, earthmoving ,equipment and railways. Their German operations are a full range provider of forging parts while being one of the top four axle beam manufacturers in the world. UK operations have expertise in producing 'flashless' parts.

They grew into a global leading forging company through several strategic acquisitions over the last few years. In April 2005, acquired the Chakan unit of Amforge Industries Limited, a public listed company on the BSE, under a scheme of arrangement sanctioned by the Bombay High court.
They established presence in the European market by acquiring Stokes Group Limited (“Stokes”), Jeco Holdings AG and Schöneweiss & Co. GmbH (“Schöneweiss”) in November 2007, under a scheme of arrangement sanctioned by the Bombay High Court.
In India, the Company is focused on design, development and machining of crankshafts and steering knuckles for cars and multi-utility vehicles. Schöneweiss, their German subsidiary, is one of the leading axle beam manufacturers in the world. Jeco-Jellinghaus GmbH ("Jeco"), Gesenkschmiede Schneider GmbH ("GSA") and Falkenroth Umformtechnik GmbH ("Falkenroth"), their other German subsidiaries, are providers of a diverse range of forging products, primarily for heavy commercial vehicles. They collectively manufacture more than 250 products. Stokes, our UK subsidiary, has an expertise in flashless forgings.

Their German operations currently hold three patents and have applied for 11 patents and they are co-development partners for new engine programmes for many of their customers.

FINANCIALS:



Though the sales grew from 214cr to 433cr during 2008 to 2012 on the profit front it was not encouraging. The company's net LOSS grew from 14cr to 94 cr from 2008 to 2010 while for 2011 , it made a loss of 3.18 cr.THE COMPANY WAS ABLE TURN AROUND making a NP of 6.78 cr for 2012.The performance got even better for the first half of 2013 with NP AT 14.25 cr.
D/E ratio stands at 0.04 while BV is at 93
Since the company belongs to a reputed promoter group and has started to give positive results, the stock may be considered for BUYING AT 53-54.