Happy Forgings Q1 FY27 Results (NSE: HAPPYFORGE)
Signal: Margin expansion
The read
The trajectory strengthened materially: revenue growth accelerated to +27.0% YoY from +20.4% in Q4FY26, while EBITDA margin expanded to 33.8% from 31.0% and PAT grew +39.2%; however, the 276bps gross-margin expansion was helped by a ₹1,110.80 lakh inventory-change credit and the filing does not disclose the underlying driver, so durability needs confirmation.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹449.42 Cr | +27.0% | +6.0% |
| EBIT | ₹125.7 Cr | N/A | |
| Net profit | ₹91.46 Cr | +39.2% | |
| EPS | ₹9.7 | +39.2% | |
| EBIT margin | 33.8% |
P&L walk
Consolidated revenue increased to ₹44,942.23 lakh (+27.0% YoY, +6.0% QoQ), EBITDA margin expanded to 33.8% from 31.0%, and PAT grew to ₹9,146.13 lakh (+39.2% YoY), with the subsidiary contributing only a ₹0.21 lakh loss.
Segments
The group is reported as a single operating segment; the wholly owned subsidiary generated nil revenue and a ₹0.21 lakh loss, so consolidated earnings remain effectively the parent company's earnings.
Key positives
- Revenue of ₹44,942.23 lakh grew +27.0% YoY and +6.0% QoQ, accelerating from +20.4% YoY in Q4FY26.
- EBITDA margin expanded to 33.8% from 31.0% YoY, the sixth consecutive quarter of margin expansion according to the recent company history.
- Gross margin expanded 276bps YoY to 60.7%, while raw-material cost remained broadly stable at 41.8% of revenue versus 41.2% YoY.
- PAT of ₹9,146.13 lakh grew +39.2% YoY, and EPS of ₹9.70 tracked PAT growth without a material dilution signal.
Key concerns
- The gross-margin tailwind was accompanied by a ₹1,110.80 lakh inventory-change credit versus a ₹312.32 lakh charge in the year-ago quarter; the filing does not disclose whether this is repeatable.
- Depreciation rose +27.7% YoY to ₹2,623.66 lakh, but the quarterly filing does not disclose the fixed-asset or CWIP base needed to assess the associated capex cycle.
- Finance costs increased +32.9% YoY to ₹306.25 lakh, despite declining 19.7% QoQ.
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