Given Happy Forgings' current scale and a large addressable global opportunity, especially owing to the shifting global landscape, we see long-term runway for growth.
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ICICI Securities Report
Happy Forgings Ltd. is a leading manufacturer of complex, heavy-forged and precision-machined components. Happy Forgings' focus on enhancing its capabilities has helped expand the company's product portfolio and customer base across diverse segments (commercial vehicle, passenger vehicle, farm, OHV, industrials) and geographies. This has enabled Happy Forgings to consistently outperform the underlying industry.
Given Happy Forgings' current scale and a large addressable global opportunity, especially owing to the shifting global landscape, we see long-term runway for growth.
With ~20% pre-tax RoCE (depressed due to high capex phase), we expect Happy Forgings to deliver ~13% earnings CAGR during FY25–28E despite a muted outlook for the underlying industry.
We initiate coverage on Happy Forgings with a Buy rating and target price of Rs 1,150 based on 30x Sep'27E EPS.
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