'Buy' Happy Forgings Maintains Motilal Oswal On Attractive Valuations, Sees 21% Upside

While Happy Forgings has historically focused on auto segments like commercial vehicle and farm equipment, it has strategically expanded into the non-auto space over the past few years as part of its de-risking efforts..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Happy Forgings Ltd.’s stock has corrected 34% from its peak over the past six months, driven by slower-than-expected revenues (9M FY25 growth was just 4% YoY), largely due to the ongoing slowdown in its core segments. However, we believe there are multiple growth drivers for Happy Forgings moving forward that will help offset the underlying demand weakness, including: new order wins in the Industrials segment, which will increase its contribution to 18-20% over the next two-three years from the current 14%, and further to 30% post-peak revenues from the new Rs 6.5 billion capex; new order wins in the passenger vehicle segment, which will help increase the segment’s contribution to 8-10% of revenues over the next three years;a gradual revival in both domestic and European CVs; and recovery in domestic tractors, while exports are expected to stabilize at lower levels. .While we have maintained our FY25 estimates, we have lowered our FY26 EPS estimates by 5% to factor in the adverse global macro. Backed by its new order wins and an improving mix, we expect Happy Forgings to post a 19% PAT CAGR over FY25-27. Following the correction, valuations at 24.2 times FY26E and 20.7x FY27E appear attractive. We reiterate Buy with a target price of Rs 980, valued at a 26x Dec’26E EPS..Click on the attachment to read the full report:.'Buy' Maruti Suzuki Maintains HDFC Securities, Says Launches, Exports To Drive The Structural Story.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit. .Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

'Buy' Happy Forgings Maintains Motilal Oswal On Attractive Valuations, Sees 21% Upside

Backed by its new order wins and an improving mix, Motilal Oswal expects Happy Forgings to post a 19% PAT CAGR over FY25-27. Following the correction, valuations appear attractive.

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