Motilal Oswal's research report onHappy Forgings
We met with Happy Forgings’ (HFL) management, with discussions centered around incremental growth avenues, capacity ramp-up across forgings and machining to cater to the order book, and the steady outlook for the core CV and tractor segments. The ~INR9.5b order book is expected to drive majority of topline growth over FY27-29, with PVs and industrials accounting for ~70% of the order book. While PVs and Industrials combined currently contribute 24% to revenue, management expects their contribution to rise to 45-50% over the medium term. These orders are secured at higher realizations and better margins, which, combined with the captive solar project, is expected to drive structural margin expansion over FY26-29. We expect margins to expand to 33% by FY29 from 31% currently.
Driven by new order wins, higher realizations, an improving mix, operating leverage, and benefits of the captive solar plant that will come on stream in FY28, we expect HFL to record revenue/EBITDA/PAT CAGR of 25%/28%/30% over FY26-29. We reiterate our BUY rating on the stock with a TP of INR2,438 (based on 38x Sep’28E EPS).
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latestBusiness News,Sensex, andNiftyupdates. ObtainPersonal Financeinsights, tax queries, and expert opinions onMoneycontrolor download theMoneycontrol Appto stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.