Happy Forgings Limited delivered record consolidated financial results for the quarter ended June 30, 2026, with net profit after tax (PAT) surging 39.2% year-on-year to ₹91 crore. Revenue from operations rose 27.0% YoY to ₹449 crore, marking a sequential increase of 6.0%. The strong performance was driven by a 23.1% growth in finished goods sales volume to 17,793 MT and a 3.2% improvement in average realisations to ₹253/kg. This operational efficiency translated into robust profitability, reinforcing the company’s position as a leading manufacturer of heavy forgings and precision machined components.

The filing was submitted pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 on August 04, 2026. Bindu Garg, Company Secretary & Compliance Officer of Happy Forgings Limited, signed off on the investor presentation. Management attributed the growth to broad-based demand across commercial vehicle (CV), passenger vehicle (PV), farm equipment, and off-highway segments, with exports contributing significantly to the top-line expansion.

Financial Performance Highlights

The quarter saw significant margin expansion, with EBITDA margin remaining above 30% for the fourth consecutive quarter and PAT margin exceeding 20% for the first time. Below is a summary of key financial metrics for Q1FY27:

Ashish Garg, Managing Director, Happy Forgings Limited, stated that domestic revenues grew approximately 25% YoY, while export revenues increased by over 30% YoY. Exports now contribute 28% of total revenue, indicating successful diversification. The passenger vehicle and industrial segments also gained share, rising to 8% and 16% of revenue respectively, while commercial vehicles contributed 33%.

What the Numbers Show

The data reveals a clear decoupling of revenue growth from cost inflation, evidenced by the expansion in both gross and operating margins. While finished goods volume grew by 23.1%, EBITDA grew by 39.3%, suggesting significant operating leverage. The improvement in realisation per kilogram alongside stable raw material costs has allowed the company to capture higher value addition per unit. Furthermore, the PAT margin crossing the 20% threshold for the first time indicates that top-line growth is translating efficiently into bottom-line gains, supported by disciplined expense management and an optimized product mix towards high-margin machined components, which now account for 90% of revenues.

Capacity and Future Outlook

Happy Forgings continues to invest in capacity expansion, with planned additions of ~35,000 MT in forging and ~20,000 MT in machining expected to be operational by FY28. The installation of equipment for ultra-heavy component manufacturing facilities is on track for completion by the end of FY27, positioning the company to commence commercial revenues from FY28. Additionally, a captive solar power project is progressing well, expected to contribute to operating cost efficiencies from FY28 onwards. The incremental order book, largely led by exports and passenger vehicles, provides visibility for additional annual revenue ramping up to approximately ₹950 crore over the next two to three years.

Happy Forgings reported a significant improvement in its financial performance for the first quarter of FY26 (Q1FY26), with standalone net profit rising 39% year-on-year to ₹914.6 crore. The earnings beat was underpinned by a robust 27% increase in revenue from operations, which climbed to ₹4,494.2 crore from ₹3,538.0 crore in the corresponding period of the previous year. This strong top-line growth, combined with disciplined cost management, allowed the company to expand its EBITDA margin to 31.3% from 28.59%, signaling enhanced operational leverage and efficiency.

The Board of Directors, meeting on August 04, 2026, approved the unaudited standalone and consolidated financial results for the quarter ended June 30, 2026. The results were reviewed by the statutory auditor, S.R. Batliboi & Co. LLP, pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company operates as a single segment entity manufacturing auto components and engineering parts, with no separate segment information disclosed.

Key Financial Highlights

The financial data reveals a broad-based improvement across key profitability metrics. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew to approximately ₹1,407.2 crore (derived from Revenue minus Cost of Materials, Employee Benefits, Finance Costs, Depreciation, and Other Expenses, adjusted for inventory changes) compared to ₹1,010.0 crore in Q1FY25. The expansion in EBITDA margin underscores the company's ability to convert revenue into operating profit more effectively than in the prior year.

Note: Figures are rounded for readability. Source: Company filing.

Profitability and Operational Efficiency

The simultaneous growth in absolute EBITDA and net profit highlights Happy Forgings' consistent improvement in bottom-line performance. The net profit increase from ₹656.9 crore to ₹914.6 crore reflects a meaningful uplift in earnings per share, which rose to ₹9.70 from ₹6.97 in the year-ago quarter. Diluted EPS followed a similar trajectory, increasing to ₹9.68 from ₹6.96.

Total income for the quarter stood at ₹4,605.1 crore, aided by other income of ₹110.8 crore, up from ₹103.5 crore in Q1FY25. Total expenses were contained at ₹3,378.7 crore, despite an increase in cost of raw materials and components consumed to ₹1,878.0 crore from ₹1,457.5 crore. Employee benefits expense rose to ₹387.0 crore from ₹320.9 crore, while finance costs decreased slightly to ₹30.6 crore from ₹23.0 crore, indicating favorable debt servicing conditions or lower interest rates.

Consolidated Results and Subsidiary Performance

The consolidated results mirrored the standalone figures closely, with consolidated net profit at ₹914.6 crore and revenue from operations at ₹4,494.2 crore. The group includes one wholly-owned subsidiary, HFL Technologies Private Limited, incorporated on March 16, 2024. For the quarter ended June 30, 2026, the subsidiary reported nil revenues and a net loss after tax of ₹0.21 lakh, contributing minimally to the group's overall financial position. The independent auditor's report on the subsidiary's interim results was relied upon for the consolidated conclusion.

What the Numbers Show

The divergence between revenue growth (27%) and net profit growth (39%) indicates a positive operating leverage effect. As fixed costs remain relatively stable while sales volume increases, each additional unit sold contributes more significantly to the bottom line. The expansion in EBITDA margin by over 270 basis points suggests that variable costs did not increase proportionally with revenue, potentially due to better input cost management or a shift towards higher-margin product mixes. This trend reinforces the company's financial momentum and operational resilience in the auto components sector.