Conference Call with Happy Forgings Management and Analysts on Q2FY26 Performance and Outlook. Listen to the full earnings transcript.
Castings & Forgings company Happy Forgings announced Q2FY26 results Revenue from Operations: Rs 377 crore, up 4.5% YoY, driven by 5.2% YoY volume growth in Q2, stable realisations and healthy domestic demand. Gross Profit: Rs 228 crore, up 7.1% YoY, with a margin expansion of ~150 bps. EBITDA: Rs 116 crore, up 9.9% YoY, with margins at 30.7%. PAT: Rs 73 crore, up 10.2% YoY on adjusted basis, with margins at 19.5%. Ashish Garg, Managing Director, Happy Forgings, said: “We are delighted to report a robust performance for Q2 and H1FY26, highlighted by the highest-ever quarterly gross margin (~60%) and EBITDA margin (~31%). This strong performance underscores our ability to successfully navigate softening steel prices and uneven growth across industry segments and geographies, while continuing to deliver industry-leading profitability, strong cash generation, and a healthy balance sheet that supports sustained investments for long term value creation. From a growth perspective, volumes rose 5.2% YoY in Q2, and revenue from operations increased 4.5% YoY, driven by healthy demand across domestic Commercial Vehicle, Farm Equipment, Industrial, and Passenger Vehicle segments. Export demand remained muted due to weaker end-market conditions and customer de-stocking amid evolving tariff uncertainties. Gross profit, EBITDA, and adjusted PAT outpaced revenue growth, rising by approximately 7%, 10%, and 10% YoY, respectively, supported by gross and EBITDA margin expansion of around 150 bps each. For H1FY26, the trajectory of volume and revenue growth remained similar to Q2, with margins continuing to strengthen year on year. Our balance sheet continues to rank among the strongest in the industry. Efficient debtor and inventory management resulted in nearly 100% operating cash flow conversion in H1FY26, reflecting improved working capital and strong operating cash flows. As of September 30, 2025, liquidity stood at around Rs 315 crore, providing ample financial flexibility to pursue long-term growth opportunities. Meanwhile, our Rs 650 crore capex program is progressing on schedule, laying a solid foundation for the next phase of expansion. Amid global trade realignments and tariff-related headwinds, we continue to strengthen profitability and financial resilience. The ongoing capex cycle is focused on expanding capacity, advancing forging and precision machining technologies, and deepening partnerships with leading domestic and global OEMs. Supported by new business wins and diversification into high-value industrial applications, these investments will further enhance our capabilities and position us for sustainable, broad-based growth in the years ahead.” Result PDF
Conference Call with Happy Forgings Management and Analysts on Q1FY26 Performance and Outlook. Listen to the full earnings transcript.
Castings & Forgings company Happy Forgings announced Q1FY26 results Revenue from Operations: Rs 354 crore, up 3.6% YoY, driven by 3.8% volume growth, stable realisations and robust mix of higher-quality, value-added products across core segments. Gross Profit: Rs 205 crore, up 6.3% YoY, with a margin expansion of 144 bps. EBITDA: Rs 101 crore, up 3.6% YoY, with margins at 28.6%. PAT: Rs 66 crore, up 3.0% YoY, with margins at 18.6%. Ashish Garg, Managing Director, Happy Forgings, said: “Despite persistent headwinds in several end-user industries and a deflationary steel price environment, we delivered a resilient performance in Q1FY26. Finished goods volume grew by ~4% YoY, and revenue from operations recorded a similar growth, supported by stable realisations of Rs 245/kg despite lower input steel prices. Domestic demand remained healthy, particularly in the Passenger Vehicles, Farm Equipment, and Industrial segments, driving ~7% year-on-year growth in our domestic business. In contrast, exports were impacted by sluggish demand in the Commercial Vehicles, Farm Equipment, and Off-Highway segments, as well as uncertainty around tariffs in certain geographies. As a result, offtake in some of our older businesses has declined, although there has been no loss in share of business. However, this impact has been offset by new business wins and our entry into new segments. The Passenger Vehicles and Industrials segments continue to scale up as part of our broader portfolio diversification strategy. Uncertainty in export markets persists, driven by evolving tariff dynamics. While our direct exposure to the US remains limited, the European market could experience disruptions from the spillover effects of recent tariff actions. So far, we have not seen any adverse developments in our prospective business pipeline and, in fact, anticipate securing some new orders from the European region. While tariff-related challenges may moderate revenue growth trends in the broader industry, we are confident of sustaining our margins. We continue to monitor developments closely and await further clarity on the tariff environment. Amid these challenges, where the industry is facing pressure on both growth and margins, we have managed to maintain strong profitability. Gross Profit grew by 6% YoY, outpacing revenue growth, and led to an improvement in Gross margin by ~140 basis points YoY to 57.9%, while EBITDA margin remained robust at 28.6%, comparable to FY25 levels. Our balance sheet remains strong, with liquidity of over Rs 350 crore at quarter-end, positioning us well to navigate volatility and invest in future growth. Our capex plans are progressing as scheduled, aligned with our long-term vision of building differentiated capabilities in niche, high-value product segments.” Result PDF