Happy Forging Limited (HAPPYFORGE) AI Stock Analysis

• Market Cap: ₹121.81B
• Dividend Yield: 0.28%
• Average Volume (3M): 1.78K
• Price to Earnings (P/E): 44.1
• Beta (1Y): 0.97
• Revenue Growth: 3.57%
• EPS Growth: 4.74%
• Country: IN
• Employees: 3,017
• Sector: Services
• Sector Strength: N/A
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 8.40
• Shares Outstanding: 94,327,920
• 10 Day Avg. Volume: 1,850
• 30 Day Avg. Volume: 1,780
• PEG Ratio: 4.64
• Price to Book (P/B): 4.03
• Price to Sales (P/S): 5.29
• P/FCF Ratio: 351.72
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 31.27
• Revenue Forecast (FY): ₹15.25B

• Rating: 71 Outperform
• Price Target: ₹1,435.00 ▲(22.62% Upside)
• Action: Upgraded Date: 02/14/26
• Date: Action: Upgraded 02/14/26

The score is primarily supported by strong financial performance (high margins, low leverage, and improving cash generation). Technicals are positive but overbought, which tempers the outlook. Valuation is the main drag due to a high P/E and minimal dividend yield.

Positive Factors

High Profitability & Margins

Sustained high gross (58%) and net (19%) margins indicate durable pricing power and efficient cost structure in core fabrication operations. Such margins provide long-term buffer versus input cost swings and support reinvestment or deleveraging, strengthening earnings resilience.

Conservative Balance Sheet

Very low leverage and a strong equity base reduce financial risk and increase strategic optionality for capex or M&A. Combined with a healthy ROE (14.5%), this balance sheet posture supports durable financial flexibility and resilience through industry cycles.

Improving Cash Generation

A large swing to positive free cash flow and OCF exceeding net income (OCF/NI 1.09) signals improving cash quality and earnings conversion. This structural improvement enhances the company's ability to fund capex, service debt, and support long-term operational needs.

Negative Factors

Modest Revenue Growth

Low single-digit top-line growth (~3.7%) suggests limited organic expansion absent new markets or products. Persistently modest revenue trends can constrain long-term earnings compounding, reduce ability to scale fixed-cost leverage, and pressure investor expectations over months.

Weak Free Cash Flow Conversion

Despite a large percentage increase in FCF, the free cash flow to net income ratio is only 0.08, indicating most accounting profits are not yet converting into discretionary cash. Low conversion limits capacity for sustained dividends, buybacks, or rapid deleveraging without operational improvement.

Minimal Shareholder Payouts

A near-negligible dividend yield (~0.26%) implies limited cash returned to shareholders and a payout policy that may not satisfy income-focused investors. Over the medium term, low payout reduces a reliable income component and puts more emphasis on capital gains for returns.

Happy Forging Limited Business Overview & Revenue Model

Company Description

Happy Forgings Limited engages in the manufacture of forgings and related components in India. It offers heavy forged and machined products, including bicycle pedals, brake flanges, bushes, bull gears, camshafts, crankshafts, connecting rods, crown wheels, differential cases, front axle beams, steering knuckles, differential cases, semi-machined transmission parts, planetary carriers, pinion shafts, piston pins, ring gears, suspension brackets, and valve bodies. The company serves the manufacturers of heavy commercial vehicles, farm equipment, and off highway and industrial equipment, as well as machinery for oil and gas, aerospace, defense, power generation, railways, and wind turbine industries. It also exports its products to Brazil, Italy, Japan, Spain, Sweden, Thailand, Turkey, the United Kingdom, and the United States. The company was incorporated in 1979 and is based in Ludhiana, India.

How the Company Makes Money

HAPPYFORGE generates revenue primarily through the manufacturing and sale of forged metal components. The company operates a business-to-business (B2B) model, catering to large-scale industrial clients who require custom and standardized forged parts. Key revenue streams include long-term supply contracts with major automotive manufacturers, aerospace companies, and construction firms. HAPPYFORGE also leverages strategic partnerships with raw material suppliers to optimize production costs and enhance profit margins. Additionally, the company invests in research and development to innovate its product offerings, thereby attracting new clients and expanding its market share.

Happy Forging Limited Financial Statement Overview

Summary

Strong profitability and margins (FY2025 gross margin 58%, net margin 19%) with steady revenue growth (~3.7%). Balance sheet is conservative (debt-to-equity 0.12; equity ratio 83.5%; ROE 14.5%). Cash flow is improving sharply (FCF up 515.9% and turned positive; OCF/NI 1.09), though FCF/NI remains low (0.08), limiting the score.

Income Statement

Happy Forging Limited exhibits strong profitability with a consistent increase in gross profit margin and net profit margin over the years. The gross profit margin in 2025 was 58.0%, and the net profit margin reached 19.0%, indicating efficient cost management. The revenue growth rate from 2024 to 2025 was approximately 3.7%, showcasing steady growth. The EBIT and EBITDA margins were robust, highlighting operational efficiency.

Balance Sheet

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.12, reflecting strong financial leverage management. The equity ratio stands at 83.5%, indicating a solid equity base relative to total assets. Return on equity (ROE) is impressive at 14.5%, demonstrating effective use of equity to generate profits.

Cash Flow

The cash flow statement shows a significant improvement in free cash flow, with a growth rate of 515.9% from 2024 to 2025, transitioning from negative to positive. The operating cash flow to net income ratio is 1.09, suggesting strong cash generation relative to net income. However, the free cash flow to net income ratio is lower at 0.08, indicating that while cash flow is improving, further enhancement is needed to strengthen liquidity.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	14.21B	14.09B	13.58B	11.61B	7.94B	5.85B
Gross Profit	8.29B	8.17B	7.36B	2.96B	3.48B	1.45B
EBITDA	4.39B	4.07B	4.01B	3.47B	2.37B	1.65B
Net Income	2.69B	2.67B	2.43B	2.09B	1.42B	864.48M
Balance Sheet
Total Assets	0.00	22.15B	18.86B	13.26B	11.30B	8.76B
Cash, Cash Equivalents and Short-Term Investments	604.41M	2.16B	1.22B	3.41M	14.60M	277.83M
Total Debt	0.00	2.28B	1.43B	2.19B	2.40B	1.53B
Total Liabilities	-18.50B	3.66B	2.73B	3.38B	3.42B	2.31B
Stockholders Equity	18.50B	18.50B	16.12B	9.88B	7.88B	6.45B
Cash Flow
Free Cash Flow	0.00	212.01M	-50.96M	348.70M	-1.11B	-418.11M
Operating Cash Flow	0.00	2.92B	1.89B	2.09B	802.94M	498.53M
Investing Cash Flow	0.00	-3.20B	-4.69B	-1.72B	-1.66B	-586.85M
Financing Cash Flow	0.00	401.73M	2.81B	-370.10M	825.20M	96.72M

Happy Forging Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1170.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:HAPPYFORGE, the sentiment is Positive. The current price of 1170.3 is below the 20-day moving average (MA) of 1234.66, above the 50-day MA of 1149.26, and above the 200-day MA of 1007.78, indicating a bullish trend. The MACD of 64.53 indicates Negative momentum. The RSI at 69.73 is Neutral, neither overbought nor oversold. The STOCH value of 76.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:HAPPYFORGE.

Happy Forging Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ROLEXRINGS	76 Outperform	₹35.84B	5.73	―	―	-7.82%	5.33%
MMFL	72 Outperform	₹21.76B	25.57	―	1.07%	-4.47%	-17.62%
HAPPYFORGE	71 Outperform	₹121.81B	44.09	―	0.28%	3.57%	4.74%
SANSERA	70 Outperform	₹138.81B	55.45	―	0.19%	4.56%	14.68%
TIRUPATIFL	60 Neutral	₹4.52B	75.97	―	―	-0.94%	-48.46%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%
HILTON	55 Neutral	₹906.84M	6.10	―	―	27.13%	63.22%

Happy Forging Limited Corporate Events

Happy Forgings Limited to Attend Investor Conference in Mumbai

Happy Forgings Limited has announced its participation in an upcoming Investor Conference, scheduled for December 17, 2025, in Mumbai. The company will engage in both one-on-one and group meetings organized by Dam Capital, focusing on discussions based on publicly available information. This initiative aligns with the company’s compliance with SEBI regulations and aims to enhance transparency with institutional investors.

Happy Forgings Limited Allots Shares to Employees

Happy Forgings Limited has announced the allotment of 23,651 equity shares to its employees under the company’s Employee Stock Options Scheme. This allotment will increase the company’s paid-up share capital, reflecting a strategic move to incentivize and retain talent, potentially enhancing employee satisfaction and company performance.