Happy Forgings Limited has announced its audited standalone and consolidated financial results for the quarter and year ended March 31, 2026. The company reported a robust performance in Q4 FY26, driven by volume growth and healthy margin expansion across segments. The statutory auditors, S.R. Batliboi & Co. LLP, issued an unmodified opinion on the results.

Q4 FY26 Performance Highlights

During the quarter, the company registered a volume growth of 20.6% year-on-year, resulting in a revenue increase of 20.4% to ₹424 crore. EBITDA grew by 30.4% to ₹133 crore, while PAT increased by 23.6% to ₹84 crore. The management noted that PAT growth lagged EBITDA growth primarily due to adverse foreign exchange movements.

The quarter witnessed healthy margin expansion on both year-on-year and quarter-on-quarter bases. Gross margin, EBITDA margin, and PAT margin improved by 70 basis points, 240 basis points, and 50 basis points year-on-year, respectively. For Q4 FY26, the margins stood at 59.4%, 31.5%, and 19.7%.

FY26 Annual Results

FY26 marked a milestone year for Happy Forgings, with revenue for the year standing at ₹1,546 crore, a 9.8% increase from the previous year. The EBITDA margin expanded by 157 basis points to 30.4%, while the PAT margin improved by 52 basis points year-on-year to 19.5%. The company also reduced working capital intensity, reflecting continued improvement in operational efficiency and healthy cash flow conversion.

The company witnessed healthy traction across commercial vehicles, passenger vehicles, farm equipment, and industrial segments. This was supported by improving demand conditions and increasing value addition. Backed by strong customer engagement, the company is building a robust pipeline of incremental business across existing and new customers, including encouraging business wins in the exports segment.

Management Commentary and Outlook

Addressing shareholders in an earnings call, the management stated that the outlook for FY27 remains optimistic, with expectations of late-teen volume growth while maintaining EBITDA margins broadly in line with FY26 levels. The company expects to reduce its annual power cost significantly through the solar power initiative, with partial benefits starting from FY28.

The management highlighted a strategic shift in the business mix, targeting a reduction in commercial vehicle contribution to 27% from 37%, while increasing the share of industrials to 30%-31% from 14% and passenger vehicles to 10% from 6%. The company has an order book of ₹950 crores for new businesses, including heavy forgings for data centers, executable over the next 2.5 to 3 years.

Board Decisions and Corporate Actions

The Board of Directors, at its meeting held on May 21, 2026, approved the audited standalone and consolidated financial results for the quarter and year ended March 31, 2026. The board recommended a final dividend of ₹4 per equity share of face value ₹2 each for the financial year 2025-26, subject to shareholder approval.

Additionally, the board approved the enhancement of the solar power project capacity from 25 MW AC to 35 MW AC for captive consumption. The proposed investment for the project has been revised from ₹120 crores to up to ₹170 crores.

Happy Forgings is targeting volume growth in the late-teen range, even as the company navigates near-term headwinds in its export business. Despite recent challenges, the company anticipates mid-single-digit export growth for FY 2027, reflecting a measured recovery trajectory in international markets.

Export Growth Outlook

While the near-term export environment has presented certain challenges, Happy Forgings remains focused on sustaining momentum in its international business. The company's guidance of mid-single-digit export growth for FY 2027 underscores a cautious yet constructive outlook for the segment during the period.

Key Upcoming Projects

Looking further ahead, Happy Forgings has outlined a robust pipeline of international engagements that are expected to drive stronger export performance from FY 2029 onwards. The company has secured new projects for North American clients, alongside a major industrial order from a European customer, both of which are slated to begin in FY 2029.

The following table summarises the key growth parameters and project milestones disclosed by the company:

Strategic Positioning for Future Exports

The commencement of both the North American projects and the European industrial order in FY 2029 indicates that Happy Forgings is actively building a diversified international order book. These developments are expected to serve as meaningful contributors to the company's export revenues in the medium term, positioning it for stronger growth beyond the near-term challenges currently being navigated.