Happy Forgings lifts profit 39.23% as margins widen year on year
Revenue growth outpaced costs year on year, though the operating margin eased sequentially and other income contributed 9.03% of pre-tax profit.
Filed 04 Aug 2026, 14:56 IST · Happy Forgings Ltd (HAPPYFORGE)
Key takeaways
- Consolidated net profit rose 39.23% year on year to Rs 91.46 cr as revenue grew 27.03%.
- Operating margin expanded 2.75 percentage points year on year because expenses grew 22.13%, slower than revenue.
- Sequential margin slipped 0.12 percentage points as expenses grew 6.22%, slightly faster than revenue at 6.04%.
Price around the results
Revenue momentum lifted consolidated profit
Happy Forgings’ consolidated revenue grew 27.03% year on year, while operating profit increased 39.25%, showing operating leverage in the quarter. Net profit rose 39.23% to Rs 91.46 cr, with the 38.36% increase in pre-tax profit also helped marginally by a lower tax rate. Sequentially, revenue grew 6.04% and net profit 9.45%, aided by a 19.69% decline in interest costs.
Year-on-year margin gain met a small sequential setback
Operating margin widened 2.75 percentage points year on year because expenses grew 22.13%, below revenue growth of 27.03%. On a sequential basis, expenses grew 6.22% against revenue growth of 6.04%, narrowing the margin by 0.12 percentage points. This follows three quarters of operating-margin expansion from Q1FY26 through Q4FY26.
Other income remains material to reported profit
Other income accounted for 9.03% of pre-tax profit, so reported earnings were not entirely generated by operations. The year-on-year tax rate fell 0.48 percentage points, supporting net profit growth, while interest costs increased 33.04% year on year despite falling sequentially.
Capacity additions are continuing during the capex cycle
Management said one press was commissioned in Q1FY27 and that it plans to add a 125T hammer with approximately 35,000 MT of capacity. The company also said it plans an 8,000T vertical upsetter and approximately 20,000 MT of machining capacity for heavy and near-net forging lines. Management described the business as being in a significant capex cycle with new capacity under ramp-up and said further gains are expected as utilisation stabilises.
Margins remain well above the Industrials peer median
Happy Forgings’ 31.34% operating margin was 16.7 percentage points above the 14.64% median for the 43 Industrials peers that had reported the same quarter. The stock has not yet had a post-results session to assess; after its past eight results, it rose twice and fell six times, with a median absolute move of 2.86%.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹449 cr | ₹424 cr | +6.04% | +27.03% |
| Other income | ₹11 cr | ₹6 cr | +83.14% | +7.05% |
| Expenses | ₹309 cr | ₹291 cr | +6.22% | +22.13% |
| Operating profit | ₹141 cr | ₹133 cr | +5.63% | +39.25% |
| Operating margin (%) | 31.34% | 31.46% | — | — |
| Interest | ₹3 cr | ₹4 cr | -19.69% | +33.04% |
| Depreciation | ₹26 cr | ₹25 cr | +7.06% | +27.69% |
| Profit before tax | ₹123 cr | ₹111 cr | +10.42% | +38.36% |
| Tax | ₹31 cr | ₹28 cr | +13.38% | +35.80% |
| Net profit | ₹91 cr | ₹84 cr | +9.45% | +39.23% |
| EPS (₹) | ₹9.70 | ₹8.86 | +9.48% | +39.17% |
Operating margin of 31.34% compares with a Industrials sector median of 14.64% across 43 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- One press was commissioned in Q1 FY27.
Expansion
- The company plans to add one 125T hammer with approximately 35,000 MT capacity.
- The company plans to add one 8,000T vertical upsetter for near-net forging.
- The company plans approximately 20,000 MT of additional machining capacity for upcoming heavy and near-net forging lines.
- The company is building a 20 MW captive solar power plant by 2028.
New initiatives
- The company formalised its ESG roadmap with clear priorities and governance structures to guide execution.
- The company is advancing initiatives to improve resource efficiency, use cleaner energy, and reduce emissions and waste.
Problems & risks
- The company is in a significant capex cycle with new capacities under ramp-up, and expects further gains as utilisation stabilises.
What to watch
- Whether operating margin holds above 31.34% after the 0.12 percentage-point sequential decline.
- Whether expenses continue to grow slower than revenue, as they did at 22.13% versus 27.03% year on year.
- Progress on the planned 35,000 MT hammer capacity and the 20,000 MT machining addition during the capex cycle.