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View Promises →Happy Forgings Limited — Q3 FY26
Happy Forgings delivered a strong Q3 FY26 with revenue of ₹391 crore (+10.4% YoY), EBITDA of ₹120 crore (+18.7% YoY), and PAT of ₹79 crore (+22.3% YoY).
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Happy Forgings delivered a strong Q3 FY26 with revenue of ₹391 crore (+10.4% YoY), EBITDA of ₹120 crore (+18.7% YoY), and PAT of ₹79 crore (+22.3% YoY). EBITDA margin expanded to 30.8%, a new high, driven by favorable product mix and operating leverage. Domestic CV and farm segments grew ~22% in value, while exports remained subdued due to tariff uncertainty and weak global demand. Management guided for FY27 capex of ~₹400 crore (excluding solar) and expects incremental annual business of ₹800 crore to commence from FY27, with 80-85% execution by FY28. A new 10,000-ton forging press will be commissioned in Q4 FY26. Risks include potential steel price increases and slower-than-expected export recovery.
हैप्पी फोर्जिंग्स ने वित्त वर्ष 2026 की तीसरी तिमाही में अच्छा प्रदर्शन किया। कंपनी की कमाई 391 करोड़ रुपये रही, जो पिछले साल से 10.4% ज्यादा है। कंपनी का मुनाफा (EBITDA) 120 करोड़ रुपये और शुद्ध मुनाफा (PAT) 79 करोड़ रुपये रहा। मुनाफे का मार्जिन 30.8% तक पहुंच गया, जो अब तक का सबसे अच्छा है। इसकी वजह अच्छा उत्पाद मिश्रण और कम लागत है। देश में ट्रक और ट्रैक्टर जैसे वाहनों की बिक्री 22% बढ़ी, लेकिन निर्यात कम रहा। कंपनी अगले साल 400 करोड़ रुपये का निवेश करेगी और 800 करोड़ रुपये का नया कारोबार शुरू होगा। एक नई मशीन जल्द लगेगी। जोखिम में स्टील के दाम बढ़ना और निर्यात में धीमी रिकवरी शामिल है।
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Steel price increase may pressure margins
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Volume Growth (Q3 FY26)
13.8%
+13.8% YoY
Volume growth of 13.8% YoY in Q3 FY26, driven by domestic CV, farm, and industrial segments.
Machining Capacity (Q3 FY26)
68,000 tons
+9,800 tons QoQ
Machining capacity increased to 68,000 tons with an addition of 9,800 metric tons in Q3.
Incremental Order Book
₹800 crore
New
Incremental peak annual business of ~₹800 crore expected from FY27, scaling over 2-3 years.
Export Share (Direct + Indirect)
~25%
Flat YoY
Combined export-linked revenues (direct, deemed, indirect) were largely flat YoY, with modest sequential increase.
What Changed vs Last Quarter
NEW
FY27 Capex of ~₹400 crore (excluding solar)
Management expects total capex for FY27 to be close to ₹400 crore, excluding solar project; including solar it will be ~₹480 crore.
NEW
Incremental annual business of ₹800 crore from FY27
New and incremental peak annual business of approximately ₹800 crore expected to commence from FY27, scaling over 2-3 years, with 80-85% execution by FY28.
NEW
EBITDA margin range of 29-31% medium-term
Management expects EBITDA margins to remain in a sustained range of 29-31% over the medium term, with potential improvement from export mix and solar project.
NEW
Solar project to reduce power cost by ₹25-30 crore annually
Captive solar plant (80 acres) expected to be operational from Q3 FY28, reducing power cost by ₹25-30 crore per annum on full utilization.
DROPPED
Revenue run-rate improvement from Q4 FY26
Management expects better revenue run-rate from Q4 FY26, driven by new project ramp-ups starting Q3.
DROPPED
PV segment to contribute 8-10% of revenue within 2 years
Passenger vehicle segment, currently 5% of revenue, is expected to reach 8-10% within two years, supported by SUV platform ramp-up.
DROPPED
₹650 crore capex program on schedule
The strategic capex program is progressing on schedule, with first phase (₹550 crore) expected to be operational from Q3 FY27.
DROPPED
Inorganic acquisition likely in 6-8 months
Management is evaluating 2-3 opportunities and expects to close a strategically aligned acquisition in the next 6-8 months.
NEW RISK
Steel price increase may pressure margins
Alloy steel prices are expected to rise by ₹3-4/kg, and while 85% of business has pass-through, there is a lag of 1 month (domestic) to 1 quarter (export), which could temporarily compress margins.
NEW RISK
Export recovery may be slower than expected
Direct exports remained subdued due to weak global demand and tariff uncertainties. Management noted only early signs of stabilization, and a meaningful turnaround is not guaranteed.
NEW RISK
Tariff clarity on US exports still pending
Management could not provide a clear view on the effective duty rate under Section 232 for exports to the US, stating it depends on customer import classification and remains uncertain.
NEW RISK
Heavy component capex ramp-up may take time
The heavy component capex (large crankshafts) will only start contributing meaningfully from FY28-FY29, with real marketing beginning around June-July 2026, posing execution risk.
RISK GONE
US tariff impact on export orders
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.
RISK GONE
Sustained weakness in European and US farm equipment
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.
RISK GONE
Margin sustainability amid product mix shifts
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.
RISK GONE
Inorganic acquisition execution risk
Management has been evaluating M&A for 1.5 years without closure; any acquisition could dilute return ratios if not carefully executed.
🤫 Topics management stopped discussing
Mentioned in Q1 FY26, Q2 FY26
Passenger vehicle segment, currently 5% of revenue, is expected to reach 8-10% within two years, supported by SUV platform ramp-up.
Fast read
Guidance and risk preview
Management expects total capex for FY27 to be close to ₹400 crore, excluding solar project; including solar it will be ~₹480 crore.
Alloy steel prices are expected to rise by ₹3-4/kg, and while 85% of business has pass-through, there is a lag of 1 month (domestic) to 1 quarter (...
View Risks →