Happy Forgings (HAPPYFORGE) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 revenue reached INR 354 crores (₹35,380.34 lakhs), up 3.6% year-over-year, with finished goods volume growing 3.8% to 14,457 MT, driven by strong domestic demand in Passenger Vehicles, Farm Equipment, and Industrials, despite deflationary steel prices and export headwinds.

• Gross profit margin was 57.9% (up ~140 bps YoY), EBITDA margin 28.6%, and net profit for Q1 FY26 stood at ₹6,569.81 lakhs, supported by a high share of value-added components.

• Domestic business grew ~7% year-over-year, while exports declined due to weakness in commercial vehicle, off-highway, and farm equipment segments, and tariff-related uncertainty.

• Maintained strong liquidity with over INR 350 crores at quarter-end, supporting ongoing capex and future growth initiatives.

• Earnings per share (EPS) for Q1 FY26 was ₹6.97 (basic), compared to ₹6.78 in Q1 FY25.

Financial highlights

• Revenue from operations: INR 354 crores (+3.6% YoY); EBITDA: INR 101 crores (28.6% margin, +3.6% YoY); PAT: INR 66 crores (18.6% margin, +3.2% YoY); finished goods volume: 14,457 MT (+3.8% YoY); realization per kg stable at INR 245.

• EPS (diluted) for Q1 FY26 was Rs. 6.96, up from Rs. 6.76 in Q1 FY25.

• Working capital cycle remains efficient with liquidity over INR 350 crores.

• Gross profit margin improved to 57.9% (from 56.5%); EBITDA margin steady at 28.6%.

• Machining share of revenue at 88%, a key margin lever.

Outlook and guidance

• Medium-term revenue growth outlook of 15%-18% driven by new product developments and business wins.

• FY26 expected to see high single-digit growth in both domestic CV and farm equipment segments, with ramp-up of new products and capacity.

• CapEx plan of INR 300 crores for FY26 (excluding solar), with INR 120 crores already spent in Q1; ongoing capex of Rs. ~80 Crs in FY26 to scale Passenger Vehicle segment; Rs. 650 Crs investment in heavy forgings capacity, with new facilities expected by FY27.

• Solar captive power plant project expected to commence by Q1 next financial year.

• Monitoring export market uncertainties, especially tariff dynamics in Europe; confident in sustaining margins and securing new orders.