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Revenue
₹377 Cr
verified against source
Revenue YoY
4.5%
reported change
EBITDA
₹116 Cr
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Happy Forgings delivered a robust Q2 FY26 with revenue of ₹377 crore (+4.5% YoY) and EBITDA of ₹116 crore (+9.9% YoY), driven by a 5.2% volume growth and stable realizations despite softening steel prices. EBITDA margin expanded 150 bps YoY to 30.7%, aided by a favorable product mix with 88% value-added machining. Domestic demand across CV, farm, and industrial segments remained strong, while exports faced headwinds from US tariffs and destocking, with direct US exposure down 35-40%. Management guided for improved revenue run-rate from Q4 FY26, backed by a ₹650 crore capex program (₹350 crore orders already in hand) and new PV/wind programs. Key risk: sustained weakness in export markets, particularly US and Europe, could delay growth recovery.
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Guidance to track
- Management expects better revenue run-rate from Q4 FY26, driven by new project ramp-ups starting Q3.
- Passenger vehicle segment, currently 5% of revenue, is expected to reach 8-10% within two years, supported by SUV platform ramp-up.
- The strategic capex program is progressing on schedule, with first phase (₹550 crore) expected to be operational from Q3 FY27.
- Management is evaluating 2-3 opportunities and expects to close a strategically aligned acquisition in the next 6-8 months.
Risks flagged
- US tariffs of up to 50% on certain products have led to customer destocking and order delays, with one portable genset program on hold pending tariff clarity.
- Export volumes remain low due to global market weakness, with a key UK customer's volumes halving from 48,000 to 24,000 units. Revival not expected until at least next fiscal.
- While Q2 margins were boosted by high-realization railway orders, management cautioned that sustaining 30%+ EBITDA margins depends on future product mix and commodity costs.
- Management has been evaluating M&A for 1.5 years without closure; any acquisition could dilute return ratios if not carefully executed.
Key quotes
- Our profit growth outpaced the revenue growth supported by margin expansion of about 150 basis points each in gross margin as well as the EBITDA margins as our product mix continues to have a higher share of value added machining of around 88%.
- We are very hopeful that in next 6 to 8 months probably we should be able to close something on the inorganic side as well.
- Out of this 550 crores of the total capex for the farm wind and the heavy hammer side almost 350 crores of annual orders are already there in hand.
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