Smallcap stock which is primarily engaged in the business of manufacturing complex and safety-critical, heavy-forged, and precision-machined components in India by forging capacity, was up 2 percent after the MoU with Global Manufacturer with an estimated revenue of Rs. 160 crore.
Share price movement
In Wednesday’s trading session, the shares of Happy Forgings Limited went up 1.67 percent in intra-day touching a high of Rs.947.90 per share, from its previous close of Rs. 932.25 apiece.
The share has reiterated from the day’s high and was trading at Rs. 938.05 per share which is 0.62 percent. It has delivered a negative return of 5 percent in the past year and outperformed the Nifty Index.
What happened
Happy Forgings’s stock was in focus after the company signed a Memorandum of Association (MoU) for a long-term supply contract with a global manufacturer and supplier of industrial equipment and construction machinery. This helps the company to expand into the production of heavy-weight forged and precision machined components with each part weighing upto ~1,000 kgs for mining and industrial applications.
In the MoU, the customer has committed to an approximate investment of Rs. 20 crore for tooling and development with sampling and testing planned in 2027. The supply contract is to commence in 2028 with annual revenues expected to be around Rs. 95 crores based on minimum volume commitment. The peak revenue is expected at Rs. 160 crore annually based on customer sales.
This order will be produced based on the recent capex announcement of Rs. 650 crore in January 2025. The new facilities are capable of producing heavy forged and precision machine components of more than 250 Kgs.
Management Commentary
Commenting on the development, the MD of Happy Forgings, Ashish Garg said “We are pleased to announce our first MoU in the heavy forged and precision machined components segment for parts exceeding 250 kg with a leading global manufacturer. This agreement provides strong visibility for the deployment of our new heavy forging capacity upon commissioning. It also reinforces our engineering expertise and positions HFL to pursue additional large-scale, heavyweight component opportunities across various industrial sectors. Expanding into this high-value segment aligns with our long-term strategy to diversify our portfolio, drive profitability, and create lasting value for our stakeholders.”
Financial Performance
Its reported financial results for Q3FY25 reveal that revenue from operations was up by 3.50 percent year-on-year from Rs. 342 crore in Q3FY24 to Rs.354 crore in Q3FY25. Additionally, Profit After Tax (PAT) was up 12 percent in Q3FY25 to Rs. 65 crore from Rs.58 crore in Q3FY24.
Company Profile
Happy Forgings was founded in 1979. It is a manufacturer of complex, safety-critical, heavy-forged, and precision-machined components in India. They serve the automotive, railway, construction, and other industries with forging solutions. The company has a forging capacity that ranks as the fourth largest in India.
Written by – Santhosh S
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