Happy Forgings (HAPPYFORGE) Q3 24/25 earnings summary

Executive summary

• Achieved growth in absolute revenue, EBITDA, and PAT for Q3 and 9M FY25 despite sector challenges, supported by diversification into Industrials and Passenger Vehicles and new business initiatives.

• Unaudited consolidated and standalone financial results for the quarter and nine months ended December 31, 2024, were reviewed and approved by the Board on February 7, 2025, with no material misstatements identified.

• Announced INR 650 crore CapEx for heavyweight forging facility, first of its kind in Asia, to drive future growth and expand export footprint.

• Diversification and new CapEx initiatives position the business for future growth, with steady profitability despite contraction in core CV and export markets.

Financial highlights

• Q3 FY25 revenue: INR 354 crore, up 3.6% YoY; EBITDA: INR 101 crore, up 6.6% YoY; PAT: INR 65 crore, up 11.5% YoY; EBITDA margin: 28.6%.

• 9M FY25 revenue: INR 1,057 crore, up 5.5% YoY (adjusted); EBITDA: INR 304 crore, up 8.2% YoY (adjusted); PAT: INR 195 crore, up 14.3% YoY; PAT margin: 18.4%.

• Consolidated revenue for Q3 FY25 was ₹35,432.46 lacs, up from ₹34,199.08 lacs in Q3 FY24; nine-month revenue was ₹1,05,692.24 lacs, up from ₹1,01,489.15 lacs YoY.

• Realization per kg improved by 4% YoY for 9M FY25; finished volume for 9M FY25: 42,564 MT, up 1.5%.

• Basic EPS for Q3 FY25 was ₹6.85; nine-month EPS was ₹21.20, up from ₹19.78 YoY.

Outlook and guidance

• Anticipates gradual recovery in domestic CV sector in Q4, supported by infrastructure activity and government incentives.

• Heavyweight component CapEx expected to add INR 600-800 crore in annual revenue post-commissioning by FY27.

• Industrial segment expected to reach 18%-20% of revenue in two years, excluding new CapEx impact.

• Unutilized IPO proceeds of ₹15,617.33 lacs as of December 31, 2024, are temporarily invested in fixed deposits and expected to be used for equipment purchases in the next quarter.

• Positive uptrend expected as inventory corrections are largely completed; new orders and capacity additions to drive growth.