Happy Forgings rallies nearly 7% as Motilal Oswal starts coverage with 21% upside

At 1pm, the shares of Happy Forgings were quoting Rs 985 apiece, higher by 6.1 percent on the NSE, compared to the closing price of the previous session.

Happiest Minds is a supplier to each of the top five Indian OEMs in the medium and heavy commercial vehicles industry and to four of the top five Indian OEMs in the farm equipment industry.

"The addition of the 14,000-tonne press line in Q3FY23 has enabled the
company to forge heavier, safety-critical parts, weighing up to 250kg,
while also expanding its capabilities across various industries," noted Motilal Oswal.

On the back of new order wins in auto segment, the brokerage expects Happy Forgings to continue to outperform core auto segments. Further, its healthy order wins in the industrials/exports segments would help drive an improved mix.

Motilal Oswal expects the standalone revenue to see a 21 percent CAGR over FY24-26, led by stable growth in overall CV and farm equipment volumes, addition of new capacities and products, healthy order book, and  strategic initiatives to grow businesses such as industrials and exports.

"Healthy profitability, coupled with improving utilisations, should bode well for free cash flows and improvement in return ratio," it added.

Happy Forgings is a Ludhiana-based company specialising in diversified
forging and machining services with over four decades of industry experience. Since its debut on the bourses on December 29, 2023, the shares of the company have fallen over 4 percent.

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