Conference Call with Happy Forgings Management and Analysts on Q2FY25 Performance and Outlook. Listen to the full earnings transcript.
Industrial Products company Happy Forgings announced Q2FY25 results Revenue: Rs 361 crore compared to Rs 343 crore during Q2FY24, change 5.3%. EBIDTA: Rs 105 crore compared to Rs 94 crore during Q2FY24, change 12.4%. PAT: Rs 71 crore compared to Rs 55 crore during Q2FY24, change 29.1% Ashish Garg, Managing Director said: “I am pleased to share our financial and operational performance for Q2 & H1FY25, where we achieved steady, broad-based improvements across revenue, gross profit, EBITDA and PAT. For Q2FY25, on an adjusted basis, sales grew by 6.1% YoY, with EBITDA by 14.8% and PAT increased by 23.8%. Realizations rose 3.6% to Rs. 253/Kg in Q2, driven by enhanced value addition in our product mix, despite a decline in steel prices. This reflects HFL’s consistent improvement in the product mix that comprises of highquality, niche, complex and critical machined components, which boosts our realisations and margins. These gains are reflected in our Gross Margin and EBITDA Margin for Q2FY25 which stood at 58.8% and 29.2% respectively, showing YoY growth. This positive yoy improvement is also reflected in absolute headline figures and margins for H1FY25 on an adjusted basis. In the underlying industry segments, the Commercial Vehicle, Off-Highway, and Industrial sectors are experiencing slowdown in both domestic and export markets, while Farm Equipment is seeing a decline in export markets. Despite these challenges, we have managed to outperform industry growth across most of these segments. We have successfully expanded our market share through new business while maintaining our share of business in existing accounts. Our focus remains on building a strong pipeline of new opportunities and investing in ramping up our capacities and utilization levels. As market conditions improve, we are confident that we are wellpositioned for accelerated growth. As we navigate dynamic market conditions, our dedicated approach to maintaining a strong balance sheet and commitment to high-quality, value-accretive growth will support us in delivering industry-leading profit margins and strong return ratios.” Result PDF
Industrial Products company Happy Forgings announced Q1FY25 results: Revenue from Operations of Rs 341 crore EBITDA of Rs 98 crore EBITDA % of 28.6% PAT of Rs 64 crore Contribution of machined products increased from 82% in Q1FY24 to 87% in Q1FY25 Passenger Vehicles stood at 3% in Q1FY25 as compared to 1% in the entire FY24 on the back of new order wins Exports share stood at 18% as compared to 20% in FY24 Commenting on the Q1FY25 performance, Ashish Garg, Managing Director, Happy Forgings, said: “I am pleased to present our performance for Q1FY25, marked by Revenue of Rs 341 crore, EBITDA of Rs 98 crore and PAT of Rs 64 crore. We achieved a YoY growth of ~3% in finished goods volume and ~4% increase in realisations (despite a reduction in raw material costs) leading to a ~7% growth in revenues. Our realisation and profitability levels in Q1FY25 remained broadly consistent with those reported for FY24. Realisation stood at Rs 245/kg, gross margin at 56.5% and EBITDA margin at 28.6% in Q1FY25. Machining mix remains robust at 87%, supporting our margins. We successfully entered the Passenger Vehicles segment in FY24, and this segment contributed ~3.5% to our topline this quarter. During the quarter, the underlying industry segments faced challenges, including a temporary slowdown in infrastructure-related activities due to the general elections and a slowdown in European farm equipment and power generation sectors However, our diversification strategy across different segments enabled us to perform well overall. Our planned capacity expansions are on track. We added 1,500MT of machining capacity during the quarter and will add an additional 4,500MT in Q2FY25, which will lead to a total increase of 6,000MT in machining capacity in H1FY25. Furthermore, 5,000MT of machining capacity is planned to be added in Q3FY25. We have the necessary product approvals, and we expect a simultaneous ramp-up in production enabling us to reap the benefits of increased capacity. This provides us with visibility for stronger performance throughout the remainder of the year.” Result PDF
Industrial Products company Happy Forgings announced Q4FY24 & FY24 results: Happy Forgings Limited has reported its audited financial results showcasing commendable growth, with the Board recommending a final dividend of Rs 4 per equity share for the financial year ending March 31, 2024. Q4FY24 revenue from operations rose by 14% YoY to Rs 343 crore. The company has achieved a 16% YoY growth in revenues in FY24. Operational excellence is evident through the enhanced EBITDA and PAT percentages of 28.5% and 17.9%, respectively. The return on equity (ROE) for FY24, after certain adjustments, stood resilient at 20.6%, while the return on capital employed (ROCE) after similar adjustments was robust at 26.9%. Happy Forgings has shown an impressive increase in the sale of machined products in FY24, which are higher in value, from 79% to 85%. Additionally, the industrial segment experienced significant growth, contributing 12% to the revenue, up from the previous year's 4%. Commenting on the results, Ashish Garg, Managing Director said, “We closed FY24 on a positive note registering growth, margin improvement and further diversification of our revenue streams despite slowdown in key industry segments and the Red Sea crisis. We achieved 16% growth in revenues for FY24 driven by exports and industrials business segment. Margins and profits grew substantially on YoY basis in FY24 as share of machined product sales increased from 79% to 85% of sales and together with favorable change in business mix, helped us improve our gross margins by ~3% and EBITDA margin by ~1.5%. Gross Margin stood at 56.1% and EBITDA improved to 28.5% despite increase in ESOP related costs and export freight costs. These margin improvements helped us achieve 22% growth in EBITDA and 27% growth in PAT on a YoY basis in FY24. Revenue segment diversification continued as we marked an entry into the Passenger Vehicles segment in both domestic and export market in FY24. With recent order wins in this segment, we demonstrated our ability to expand our wallet share from existing customers, giving us good visibility to achieve the targeted contribution to sales from this segment in the next 2 years. We also witnessed a significant increase in the share of industrial segment from 4% to 12% and exports from 13% to 20% of revenues in FY24. We continue to expand capacities and planned additions in forging and machining capacities are on track. Our balance sheet strength provides us the flexibility to capitalize on growth opportunities and further improve our returns profile as we deploy capital. The Board has recommended a dividend of Rs. 4 per share for FY24 which effectively means a payout of ~16%. Looking ahead, we are confident in our ability to sustain this positive momentum and drive further growth and profitability and hope that improvement in underlying business segments will trigger additional growth.” Result PDF
Conference Call with Happy Forgings Management and Analysts on Q4FY24 Performance and Outlook. Listen to the full earnings transcript.