Happy Forgings (HAPPYFORGE) Q2 25/26 earnings summary

Executive summary

• Achieved record gross margin of 60% and EBITDA margin of 31% in Q2 FY26, with strong cash generation despite softening steel prices and mixed global demand.

• Revenue for Q2 FY26 was ₹377 crore (up 4.5% YoY); H1 FY26 revenue was ₹731 crore (up 4.1% YoY).

• Domestic market drove growth, while exports faced headwinds due to global market weakness and U.S. tariffs.

• Product mix improvement and higher value-added machining (88% share) supported margin expansion.

• The company completed its IPO in December 2023, raising ₹40,000 lacs via fresh issue and listing on NSE and BSE.

Financial highlights

• Q2 FY26: Revenue ₹377 crore (+4.5% YoY), gross profit ₹228 crore (+7.1% YoY), EBITDA ₹116 crore (+9.9% YoY), PAT ₹73 crore (+10.2% YoY, adjusted).

• H1 FY26: Revenue ₹731 crore (+4.1% YoY), gross profit ₹433 crore (+6.7% YoY), EBITDA ₹217 crore (+6.9% YoY), PAT ₹139 crore (+6.7% YoY, adjusted).

• Gross margin: 60% for Q2, 59% for H1; EBITDA margin: 30.7% for Q2, 29.7% for H1.

• EPS (Diluted): ₹7.78 (Q2 FY26), ₹14.73 (H1 FY26).

• Nearly 100% operating cash flow conversion in H1 FY26; liquidity at ₹315 crore as of September 30, 2025.

Outlook and guidance

• Growth expected to accelerate from next year as new CapEx projects and product lines ramp up.

• CapEx of ₹650 crore on track, with major orders in hand and further order conversion expected.

• Inorganic growth opportunities under evaluation, with potential closure in 6-8 months.

• Facilities for heavy forgings to be commissioned by FY27, enabling entry into higher-weight segments.

• No deviation or variation in the use of IPO funds was reported; unutilized IPO proceeds of ₹7,646.90 lacs are temporarily invested in fixed deposits.