Happy Forgings (HAPPYFORGE) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue reached INR 341 crore, EBITDA at INR 98 crore, and PAT at INR 64 crore, reflecting 7% adjusted revenue growth year-over-year driven by 3% volume and 4% realization increases.

• Machining mix remained strong at 87%, supporting high margins; passenger vehicle segment contributed 3.5% of sales and is expected to rise in coming years.

• Capacity expansion on track, with 1,500 MT added in Q1 FY25 and further 4,500 MT and 5,000 MT planned for Q2 and Q3 FY25, respectively.

• Revenue diversification and new customer wins helped offset challenges in core industrial segments and export markets.

• Unaudited standalone and consolidated financial results for the quarter ended June 30, 2024, were approved by the Board on August 7, 2024.

Financial highlights

• Adjusted revenue grew 7% year-over-year, excluding a one-time order impact in Q1 FY24; reported growth was 4%.

• Adjusted EBITDA grew 5% year-over-year; reported EBITDA declined 3% due to the prior year’s one-time gain.

• Adjusted PAT increased 9% year-over-year; finished goods volume rose 2.8% to 13,933 MT.

• Realization per kg was INR 245, up 4% YoY (adjusted).

• Basic EPS (standalone) for Q1 FY25 was 6.78.

Outlook and guidance

• Additional machining capacity of 4,500 MT in Q2 and 5,000 MT in Q3 FY25 will support higher production and revenue growth.

• Anticipates improved demand in H2 FY25, driven by political stability, infrastructure spending, and a good monsoon boosting rural demand.

• Double-digit growth targeted for FY25, with ramp-up in new projects and capacity expansions.

• Visibility for growth supported by new product approvals and ramp-up in production.

• No deviation or variation in the use of IPO proceeds; funds are being utilized as per the stated objectives.