'Happy Forgings (HFL) is the second largest producer of commercial vehicle (CV) and high horse-power industrial crankshafts in India and ranks as the fourth largest engineering-led manufacturer of complex and safety-critical heavy forged and machined components in the country by forging capacity. It has built a reputation for manufacturing high-value precision components catering to a diversified base of domestic and global OEMs across automotive and non-automotive industries. HFL’s product portfolio includes crankshafts, front axle and suspension components, steering knuckles, differential housings, transmission parts, pinion shafts, gears, shafts and valve bodies, manufactured to stringent tolerances as low as 0.005–0.2 mm.
Domestic sales accounted for around 84% of revenue, while exports contributed around 16% in H1 FY2026, reflecting HFL’s strong domestic positioning, alongside a meaningful export presence. From an end-market perspective, revenue was broadly distributed across commercial vehicles (CVs) around 37%, farm equipment 34%, industrials 13%, off-highway vehicles 10%, and passenger vehicles (PVs) 5%.
Within Industrials, HFL caters to a wide range of end users, including wind energy, oil & gas, and power generation, underscoring its increasing exposure to non-automotive segments. Value-added forged and machined components constituted around 88% of total revenue, while pure forged products accounted for the remaining 12% in H1 FY2026.
HFL is implementing a Rs 650 crore strategic capex program over FY2025–FY2027 to drive its next phase of growth and diversification. Of this, Rs 550 crore is planned in the first phase, comprising Rs 150 crore for wind energy and heavy tractor axle programs and Rs 400 crore for a large hammer forging and machining line. Further, Rs 200–250 crore of machining capex will be deployed in later phases, linked to utilization thresholds of 70–80%, ensuring prudent and demand-led investment. For the first phase of the capex program, it has already secured Rs 350 crore worth of annualized orders, largely from the non-automotive industrial segment, ensuring revenue visibility.
Consolidated net sales rose 5% to Rs 377.39 crore in Q2 FY 2026 over a year ago, driven largely by a 5.2% growth in volumes. Operating profit margin (OPM) increased 160 bps to 30.7%, led by an
improved product mix, with value-added machine components accounting for around 88% of total revenue and leading to a 10% growth in operating profit (OP) to Rs 115.8 crore. Net profit rose 3% to Rs 73.44 crore.
Consolidated net sales increased 4% to Rs 731.19 crore in H1 FY2026 over a year ago. OPM was higher by 80 bps to 29.7%, leading to a 7% increase in OP to Rs 216.95 crore. Net profit was up 3% to Rs 139.12 crore.
HFL expects domestic CV sales to pick up in single digits in H2 FY 2026, driven by new order execution. The farm segment remains strong due to robust domestic demand. While CV and farm demand in the US and EU is currently weak (high single-digit to low double-digit decline over the year), gradual recovery is expected from H2 FY2026. The company anticipates outperforming the market, supported by new order wins and ongoing execution of existing contracts.
HFL is aiming to sustain its current margin levels (around 28–29%), led by a gradual improvement in capacity utilization (currently at 60%), rising mix of fullymachined components and higher operating leverage.
The company is confident of reviving the historical 15–20% growth range from FY2027, following a challenging 12–18-month period due to global industry slowdown.
Over the next three years, HFL expects the share of CVs and farm equipment to its top line reduce to 50% with the share of other increasing to about 50%. The shift is aimed at reducing cyclicality and increasing exposure to higher value-added, capital-intensive segments.
We expect HFL to register consolidated EPS of Rs 30.3 for FY26 and Rs 37.8 for FY27. Thescrip was trading around Rs 1107.70 on the BSE at the close of 29 December 2025.
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