2 Undervalued Casting and Forging Stocks Trading Below Fair Value

India's casting and forging industry supplies critical components to the automotive, railway and industrial machinery sectors, benefiting from both domestic demand and export order wins. Not every stock in the space carries the same rich multiple. A screen of listed casting and forging stocks against the sector's average price to earnings ratio surfaces two names still priced below that benchmark.

Steelcast and MM Forgings both currently trade below the broader casting and forging industry PE, despite maintaining positive return on equity. This piece breaks down why each stock screens as undervalued, what the underlying financials show, and the risks that come with owning metal component manufacturers.

Click Here – Get Free Investment Predictions

Why These Casting and Forging Stocks Screen as Undervalued

The casting and forging industry currently carries an average price to earnings ratio of close to 53 times trailing earnings for companies in this metal components classification. A stock trading meaningfully below that average, while still posting positive return on equity, is a reasonable starting point for a relative valuation screen.

Both companies below clear that bar, though Steelcast is the more conservatively financed of the two, a distinction worth noting among casting and forging stocks that otherwise look similarly undervalued on a headline basis.

The table below lists these two companies alongside their current price, valuation multiple and return ratios.

Company	NSE Ticker	CMP (Rs)	PE Ratio	Sector PE	ROE	Market Cap (Rs Cr)
Steelcast	STEELCAS	345.70	38.37	53.48	21.99%	3,479
MM Forgings	MMFL	622.40	17.84	53.32	10.09%	3,021

Steelcast: Debt Free with the Highest ROE

Steelcast manufactures alloy and special steel castings for the railway, mining and earthmoving equipment industries, with a meaningful export presence. The stock trades at a price to earnings ratio of 38.37, below the sector average of 53.48, at a current price of around Rs 346.

Return on equity of 21.99 percent is the highest of the two casting and forging stocks in this list, supported by a debt to equity ratio of 0.00. On an EPS of Rs 8.96 and book value of Rs 39.03, the price to book multiple works out to 8.81.

MM Forgings: Widest Discount, Higher Leverage

MM Forgings manufactures forged and machined components primarily for the commercial vehicle and industrial equipment sectors, with a growing share of export revenue. Its price to earnings ratio of 17.84 is less than a third of the sector average of 53.32, at a current share price of around Rs 622.

Return on equity of 10.09 percent is more modest than Steelcast, and the debt to equity ratio of 1.10 signals meaningfully higher leverage. On an EPS of Rs 35.07 and book value of Rs 201.99, the price to book multiple of 3.10 is far lower than Steelcast's, underscoring the scale of the valuation gap between the two.

Valuation Snapshot: PE, PB and Dividend Yield

Beyond the headline price to earnings ratio, book value multiples and dividend yield tell two different stories for these casting and forging stocks. Steelcast commands a richer price to book multiple on the strength of its debt free balance sheet, while MM Forgings looks cheaper on nearly every metric but carries more leverage.

Company	Price to Book	Book Value (Rs)	Dividend Yield	Debt to Equity
Steelcast	8.81	39.03	0.50%	0.00
MM Forgings	3.10	201.99	0.64%	1.10

The gap in leverage between the two names is a reminder that a similar discount to sector PE can come from very different balance sheet profiles among casting and forging stocks. Steelcast carries no debt and a higher return on equity, while MM Forgings trades cheaper on book value but runs meaningfully higher leverage.

Check Live PE, PB and ROE Data on the Univest Screener

Risks to Consider Before Buying These Casting and Forging Stocks

A discount to the sector average price to earnings ratio does not remove company specific risk in a business tied closely to auto, railway and industrial production cycles.

OEM and Export Order Cyclicality

Casting and forging demand tracks commercial vehicle, railway and industrial equipment production, both in India and in export markets. A slowdown in any of these end markets can quickly reduce order volumes.

Steel and Alloy Price Volatility

Steel and specialty alloy costs make up a large share of manufacturing expenses, and sharp swings in commodity prices can compress margins on fixed price contracts.

Leverage and Balance Sheet Risk

Companies with higher debt to equity ratios, such as MM Forgings in this list, are more exposed to rising interest costs and refinancing risk than debt free peers in the same sector.

Currency Exposure on Exports

A meaningful share of revenue for both companies comes from exports, and currency fluctuations can add volatility to realisations even when order volumes remain steady.

How to Track These Casting and Forging Stocks

Investors evaluating these two names should track quarterly export order inflows, steel price trends, and how the sector average PE moves relative to each company's own multiple over time, rather than relying on the valuation gap in isolation. Comparing these numbers regularly is the most reliable way to judge whether the discount to fair value remains intact or has already closed.

Download the Univest iOS App or Univest Android App to track Steelcast and MM Forgings share prices live and set price alerts.

Conclusion

Steelcast and MM Forgings are the two casting and forging stocks currently trading below the sector's average price to earnings ratio of close to 53 times, while both maintain positive return on equity. That combination makes them worth a closer look for investors who already want exposure to India's auto and industrial component theme, though OEM cyclicality and differing leverage profiles mean position sizing and diversification still matter when adding these names to a portfolio.

FAQs on Undervalued Casting and Forging Stocks

Which casting and forging stocks are trading below the sector average PE?

Ans. Steelcast and MM Forgings are currently trading below the casting and forging sector's average price to earnings ratio of close to 53 times, based on live NSE and BSE pricing.

Is Steelcast undervalued compared to its sector?

Ans. Steelcast trades at a price to earnings ratio of 38.37, below the sector average of 53.48, while delivering a return on equity of 21.99 percent and carrying zero debt.

Why does MM Forgings trade at such a wide discount?

Ans. MM Forgings trades at 17.84 times earnings against a sector average of 53.32, reflecting its more modest return on equity of 10.09 percent and higher leverage compared with Steelcast.

What is the market capitalisation of MM Forgings?

Ans. MM Forgings has a market capitalisation of around Rs 3,021 crore, with a price to earnings ratio of 17.84 against the sector average of 53.32.

Are these casting and forging stocks debt free?

Ans. Steelcast is completely debt free with a debt to equity ratio of 0.00, while MM Forgings carries a higher debt to equity ratio of 1.10.

What are the main risks in undervalued casting and forging stocks?

Ans. The main risks include cyclicality tied to OEM and export order inflows, volatility in steel and alloy prices, balance sheet leverage at more indebted names, and currency exposure on export revenue.

Is a low PE enough reason to buy a forging stock?

Ans. A price to earnings ratio below the sector average is a useful starting screen for casting and forging stocks but not a standalone buy signal. Investors should also review export exposure, customer concentration and balance sheet leverage before investing.