Buy Happy Forgings; target of Rs 1200: Motilal Oswal

Motilal Oswal's research report on Happy Forgings

Happy Forgings’ (HFL) 2QFY26 PAT at INR734m was largely in line with our estimate. The key highlight of 2Q was its record high margins at 30.7% (+150bp YoY) in a weak demand environment, especially in exports. HFL’s superior financial track record compared to its peers serves as a testament to its inherent operational efficiencies and is likely to be a key competitive advantage going forward. Given this, we expect HFL to continue to outperform core industry growth. Overall, we expect HFL to post a CAGR of 17%/20%/22% in standalone revenue/EBITDA/PAT during FY25-28E. We reiterate our BUY rating on the stock with a TP of INR1,200 (based on 27x Sep’27E EPS).

Outlook

We expect HFL to post a CAGR of 17%/20%/22% in standalone revenue/EBITDA/PAT during FY25-28E. We reiterate our BUY rating on the stock with a TP of INR1,200 (based on 27x Sep’27E EPS).