HAPPYFORGE - Happy Forgings

📊 NSE: HAPPYFORGE 🏢 Castings & Forgings 📅 Last Updated: 12/13/2025 22:48

💰 Financial Performance

Revenue Growth by Segment

Domestic business (82% of total) grew 6.2% YoY in FY25. CV and Tractor segments contribute ~70% of total revenue. Q2 FY26 revenue of INR 377 Cr grew 4.5% YoY, while H1 FY26 revenue of INR 731 Cr grew 4.1% YoY.

Geographic Revenue Split

Domestic market accounts for 82% of total revenues (INR 1,155 Cr), while Exports account for the remaining 18% (INR 254 Cr) as of FY25.

Profitability Margins

Gross Margin improved from 56.1% in FY24 to 58.0% in FY25, reaching a record 60% in Q2 FY26. PAT Margin rose from 17.9% in FY24 to 19.0% in FY25 (INR 267.44 Cr).

EBITDA Margin

EBITDA Margin was 28.9% in FY25 (INR 406.70 Cr), up from 28.5% YoY. Q2 FY26 EBITDA margin expanded to 30.7% (INR 116 Cr), a YoY increase of 10%.

Capital Expenditure

Planned total capex of INR 850-1,000 Cr over FY26-FY28. Currently executing a strategic capex program of INR 650 Cr for heavy segment forging infrastructure. INR 129 Cr of unutilized IPO proceeds remained as of March 2025.

Credit Rating & Borrowing

Ratings reaffirmed at [ICRA]AA(Stable)/[ICRA]A1+. Finance costs decreased 36% YoY to INR 7.53 Cr in FY25. Gearing remains low at 0.1x.

⚙️ Operational Drivers

Raw Materials

Steel is the primary raw material. Softening steel prices impacted topline growth but supported margin expansion as realizations were maintained.

Capacity Expansion

Strategic capex of INR 650 Cr is creating state-of-the-art forging infrastructure for heavy segment and precision components. Total capacity expansion outlay is INR 850-1,000 Cr through FY28.

Raw Material Costs

Raw material costs are a major component of the 42% direct cost base (implied by 58% gross margin). Realizations improved to INR 248/kg in FY25 and INR 251/kg in Q2 FY26 despite falling input costs.

Manufacturing Efficiency

Value-added machining share reached 88% of the product mix. Q2 FY26 saw operational volume growth of 5.2%.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Achieving growth through a INR 650 Cr capex program for heavy segment forging, diversifying into non-automotive industrial applications (power generation), and securing orders from new European OEMs. The company is also expanding its presence in the passenger vehicle segment.

Products & Services

Forged and machined components, heavy forged components, and precision engineering products for commercial vehicles, tractors, and industrial gensets.

Brand Portfolio

Happy Forgings

New Products/Services

Foray into industrial segments (power generation applications) and passenger vehicles to diversify the business profile.

Market Expansion

Expanding geographic footprint and export business to insulate against domestic cyclicality. Securing a solid roster of orders from new larger European OEMs.

Strategic Alliances

Expanding partnerships with leading domestic OEMs and building new relationships with European OEMs.

🌍 External Factors

Industry Trends

Growing demand for backup power solutions in data centers, healthcare, and 5G infrastructure is driving the industrial vertical. The industry is shifting toward higher value-add machined components (88% of company mix).

Competitive Moat

Durable advantage through a high 88% value-added machining mix, 45+ years of engineering expertise, and a conservative capital structure (0.1x debt/equity) that allows for massive self-funded capex.