Happy Forgings (HAPPYFORGE) Q3 25/26 earnings summary

Executive summary

• Achieved record performance in Q3 and nine months FY26, with all-time highs in revenue, gross profit, EBITDA, and PAT, driven by strong domestic demand in commercial vehicles, farm equipment, and passenger vehicles, despite challenging export markets and softening steel prices.

• Profitability growth outpaced revenue, with Q3 PAT up 22.3% YoY and strong cash generation enabling capacity investments without straining the balance sheet.

• Sequential improvement in Q3 over Q2 reinforces growth momentum, positioning for a strong FY26 close.

• EPS for Q3 FY26 was 8.36–8.37, with nine-month EPS at 23.09–23.13.

• Operating cash flow for nine months was INR 315 crore, with liquid assets exceeding INR 400 crore, supporting growth and capex.

Financial highlights

• Q3 FY26 revenue: INR 391 crore (up 10.4% YoY); nine-month revenue: INR 1,122 crore (up 6.2% YoY); Q3 PAT: INR 79 crore (up 22.3% YoY); nine-month PAT: INR 218 crore (up 11.8% YoY).

• Q3 gross profit: INR 230 crore (up 12.2% YoY); nine-month gross profit: INR 663 crore (up 8.5% YoY); gross margins at 58.9% (Q3) and 59.1% (nine months).

• Q3 EBITDA: INR 120 crore (up 18.7% YoY); nine-month EBITDA: INR 337 crore (up 10.8% YoY); EBITDA margins at 30.8% (Q3) and 30.1% (nine months).

• Realisation per kg for nine months: INR 245 (-1.3% YoY); working capital intensity reduced, supporting robust cash flow conversion.

• Basic EPS for Q3 FY26: 8.36–8.37; nine-month EPS: 23.09–23.13.

Outlook and guidance

• Expect continued domestic demand momentum and gradual export recovery as global trade dynamics evolve and tariff headwinds moderate.

• Visibility of new peak annual business of ~INR 800 crore from FY27, scaling over 2–3 years, mainly in industrial and passenger vehicles, with two-thirds export-oriented.

• EBITDA margin guidance maintained at 29%-31% over the medium term.

• CapEx for FY26 expected at INR 400–500 crore; FY27 CapEx projected at INR 400 crore (excluding solar), INR 480 crore (including solar).

• Unutilized IPO proceeds of INR 76.47 crore as of December 31, 2025, are temporarily invested in fixed deposits for future equipment purchases.