Happy Forging Limited · NSE:HAPPYFORGE
Happy Forging — Happy Forgings — Q3 FY24 Earnings Presentation
33 slides from Happy Forging's earnings presentation, Feb 10, 2024
Slide 1: Exchange filing cover letter
February 10, 2024 To BSE Limited National Stock Exchange of India Ltd 1st Floor, New Trading Ring, Exchange Plaza, 5th Floor, Rotunda Building, Plot No. C/1, G block, Phiroze Jeejeebhoy Towers, Bandra-Kurla Complex, Dalal Street, Mumbai 400001 Bandra (E), Mumbai 400051. Scrip Code: 544057 Symbol: HA
Slide 2: Investor Presentation Q3 & 9M FY24
INVESTOR PRESENTATION Q3 & 9M FY24
Slide 3: Safe Harbor
SAFE HARBOR This presentation and the accompanying slides (the “Presentation”), which have been prepared by Happy Forgings Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securi
Slide 4: Performance Highlights Q3 & 9MFY24
Performance Highlights Q3 & 9MFY24
Slide 5: Message from the Managing Director
MESSAGE FROM THE MANAGING DIRECTOR We are happy to see an overwhelming response to our IPO. With the IPO proceeds, we have successfully reduced debt and plan to utilize the remaining funds for the upcoming capex. Current Debt/Equity is 0.1x. In Q3FY24, we registered a 16% YoY revenue growth despite
Slide 6: Consistency of Growth and Returns (1/2)
CONSISTENCY OF GROWTH AND RETURNS (1/2) Figures (Rs. in Cr) REVENUE FROM OPERATIONS EBITDA & EBITDA% PAT & PAT% 24.9% 27.8% 14.1% 16.9% 16% 30% 39% 342 95 58 294 73 Q3 FY24 42 Q3FY23 Q3FY24 Q3FY23 Q3FY24 Q3FY23 Q3FY24 28.5% 28.6% 17.7% 17.5% 14%/17%* 14%/25%* 12%/26%* 1,015 290 177 894 255 158 9MFY2
Slide 7: Consistency of Growth and Returns (2/2)
CONSISTENCY OF GROWTH AND RETURNS (2/2) Superior return metrics with reducing net debt/EBITDA wherein capex has been largely funded by internal accruals ROE % ROCE % 23.5% 22.0% 19.9% 25.7% 24.4% 21.1% 14.4% 16.7% FY21 FY22 FY23 9MFY24* FY21 FY22 FY23 9MFY24* FIXED ASSETS TURNOVER^ NET DEBT/EBITDA 1
Slide 8: Profit & Loss Statement
PROFIT & LOSS STATEMENT Figures (Rs. in Cr) Q3 FY24 Q3 FY23 YoY Q2 FY24 QoQ 9M FY24 9M FY23* YoY* FY23 Revenue from Operations 342 294 16% 343 (0%) 1,015 894 14% 1,197 Raw Material cost & change in inventories 152 144 153 447 415 551 Gross Profit 190 150 26% 190 (0%) 568 480 18% 645 Gross Profit Mar
Slide 9: Well Diversified Revenue Mix
WELL DIVERSIFIED REVENUE MIX PRODUCT MIX SECTOR MIX GEOGRAPHY MIX 4% 13% 16% 13% 20% 78% 43% 14% 41% 84% 37% 80% 32% 87% 22% 16% 9M FY23 9M FY24 9M FY23 9M FY24 9M FY23 9M FY24 Automotive - Commercial Vehicles Non-Automotive - Farm Equipments Forged Products Machined Products Non-Automotive - Off Hi
Slide 10: Company Overview
Company Overview
Slide 11: Guiding Principles: Our Vision & Values
GUIDING PRINCIPLES: OUR VISION & VALUES Our Vision To be amongst the top 10 forging and machining companies globally Our Values State-of-the-art Technology Deliver more than promised Respect and encourage people Inspire innovation and creativity Care for the environment and society 10
Slide 12: A Legacy of Excellence
A LEGACY OF EXCELLENCE About Us Incorporated in July 1979, Happy Forgings Limited is an Indian manufacturer specializing in designing and manufacturing heavy forgings and high-precision machined components Revenue EBITDA % The company manufactures high precision products such as crankshafts, FY23/9M
Slide 13: Business Evolution Spanning Four Decades
BUSINESS EVOLUTION SPANNING FOUR DECADES YEAR YEAR YEAR YEAR YEAR 1979 - 2005 YEAR 2010 - 2015 YEAR 2020 - 2022 YEAR 2024 - 2025 1979 2008 2017-2018 2023 Heavy-duty Expanded machining Installed 8 Installation and Initiated installation of Commissioned the HFL achieved a milestone Established a hamme
Slide 14: Multi-Product and Multi-Industry Offerings
MULTI-PRODUCT AND MULTI-INDUSTRY OFFERINGS Crankshafts Front Axle Components Differential Case Suspension Products (10 to 210 kgs) Front Axle Beam (70 to 195 kgs) + Steering (5 to 40 kgs) Brake Flange + Suspension Bracket Knuckle (27 to 45 kgs) (5 to 16kgs) Wind Turbine Industry Railways Parts Oil &
Slide 15: Paving Our Path Towards Accelerated Value Creation
PAVING OUR PATH TOWARDS ACCELERATED VALUE CREATION Transition from a forging led player to a leading manufacturer of machined components in India In-house design capabilities & fungible production lines have led to a diverse product offering, continuous value addition Increasing global presence thro
Slide 16: Strategic Evolution: From Forging to Machined Components
STRATEGIC EVOLUTION: FROM FORGING TO MACHINED COMPONENTS CHANGE IN PRODUCT MIX Forged Products CAGR Growth (FY21 to FY23): 24% Machined Products CAGR Growth (FY21 to FY23): 45% • An engineering-led manufacturer of complex and safety critical, heavy forged and high-precision machined components for a
Slide 17: High Entry Barriers
HIGH ENTRY BARRIERS CAPITAL INTENSIVE BUSINESS ▪ Capital-intensive business that involves complex technology, machinery and systems acting as an entry barrier for smaller and unorganized players STRATEGIC RESILIENCE ▪ Lengthy customer and product approval processes SELECTIVE SUPPLIER DYNAMICS ▪ Diff
Slide 18: Diversification Across Industries, Customers & Geographies
DIVERSIFICATION ACROSS INDUSTRIES, CUSTOMERS & GEOGRAPHIES Revenues from automotive & non-automotive applications Diversified across industries FY21 9M FY24 13% Automotive - Commercial Vehicles 17% 2% 38% 14% 41% Non-Automotive - Farm Equipments Power Commercial Farm Non-Automotive - Off Highway Veh
Slide 19: Ability to Install and Operate High Tonnage Presses (1/2)
HAVE DEMONSTRATED THE ABILITY TO INSTALL AND OPERATE HIGH TONNAGE PRESSES AND PRECISION MACHINING (1/2) Kanganwal I Kanganwal II Dugri Facility Started in 1995 Started in 2006 Started in 2021 Location Kanganwal, Ludhiana Kanganwal, Ludhiana Dugri, Ludhiana Forging Annual 14,000 MT 53,000 MT 53,000 M
Slide 20: Ability to Install and Operate High Tonnage Presses (2/2)
HAVE DEMONSTRATED THE ABILITY TO INSTALL AND OPERATE HIGH TONNAGE PRESSES AND PRECISION MACHINING (2/2) Strategically adding capacity with a strong focus on capital efficiency 67% 87% 63% 79% 60% 59% 71% 78% Significant manufacturing capacities act as an 1,20,000 51,000 entry barrier for other manuf
Slide 21: Experienced Promoters and Senior Management Team
EXPERIENCED PROMOTERS AND SENIOR MANAGEMENT TEAM Paritosh Kumar Garg Ashish Garg Megha Garg Chairman & Managing Director Managing Director Whole-Time Director • Has over 44 years of experience in the industrial sector • Has ~17 years of experience in the industrial sector • Has ~ 8 years of experien
Slide 22: Seasoned Board
SEASONED BOARD Satish Sekhri Ravindra Pisharody Atul Behari Lall Independent Director Independent Director Independent Director • Has more than 48 years of experience in the field • Has a total work experience of 38 years • Has more than 29 years of experience in the of sales and marketing and the i
Slide 23: Navigating the Path to Sustainable Growth
NAVIGATING THE PATH TO SUSTAINABLE GROWTH Grow inorganically through Use in-house capabilities for strategic acquisitions and product development to tap STRATEGIES alliances into industrial market opportunities AHEAD Enter lightweight forging and Continue to reduce operating machining for passenger
Slide 24: Well-Positioned to Cater to the Industry Growth Opportunity
WELL-POSITIONED TO CATER TO THE INDUSTRY GROWTH OPPORTUNITY With ~0.1%/ 0.7% share (FY23) of the Global and Indian forging, machining & crankshaft markets (respectively), Happy Forgings is well positioned to cater to the growing demand from these industries given its engineering capabilities and adv
Slide 25: Historical Financial Statements
Historical Financial Statements
Slide 26: Profit & Loss Statement
PROFIT & LOSS STATEMENT Profit and Loss (in Rs. Crs) FY23* FY22 FY21 Revenue from Operations 1,197 860 585 Cost of Materials Consumed 551 388 252 Gross Profit 645 472 333 Gross Profit Margin (%) 53.9% 54.8% 57.0% Employee Cost 88 69 49 Other Expenses 217 172 126 EBITDA 341 231 159 EBITDA Margin (%)
Slide 27: Balance Sheet
BALANCE SHEET Assets (in Rs. Crs) Mar’23 Mar’22 Mar’21 Equity & Liabilities (in Rs. Crs) Mar’23 Mar’22 Mar’21 Non-Current Assets 836 704 539 EQUITY 988 788 645 Property, Plant and Equipment 677 455 415 Equity Share Capital 18 18 9 Capital work-in-progress 75 212 39 Other Equity 970 770 636 Intangibl
Slide 28: Cash Flow Statement
CASH FLOW STATEMENT Cash Flow Statement (Rs in Cr) Mar’23 Mar’22 Mar’21 Profit Before Tax 280 192 117 Adjustments for Depreciation and other items 71 40 49 Operating profit before working capital changes 351 232 166 Changes in working capital -78 -109 -82 Cash generated from operations 273 123 84 Di
Slide 29: Impact Beyond Financial Performance
Impact Beyond Financial Performance
Slide 30: Emphasis on Environmental and Social Initiatives
EMPHASIS ON ENVIRONMENTAL AND SOCIAL INITIATIVES Environment Sustainability Initiatives Corporate Social Responsibility Initiatives Utilizing Alternate Sources of Energy Initiatives in Health, Education and Environment • Solar power plants with total capacity of 5MW installed at our • Donated toward
Slide 31: CSR Activities
CSR ACTIVITIES Before After Happy Forgings constructed a school building for a government primary Donated Dialysis Machines to Helpful Empowering underprivileged kids school at Kanganwal, Ludhiana, intending to provide quality infrastructure NGO ensuring free dialysis for those under with Noble Foun
Slide 32: Awards, Accreditations and Recognitions
AWARDS, ACCREDITATIONS AND RECOGNITIONS 2024 Received ‘Best Supplier Award’ at the Global supplier meet 2024 from TAFE ‘Supplier Excellence Award’ for delivery performance at AAM (American Axle Manufacturing) India Supplier Event 2023 ‘Award for Outstanding Contribution in Gear Business’ at the Annu
Slide 33: For Further Information, Please Contact
COMPANY INVESTOR RELATIONS ADVISOR FOR FURTHER INFORMATION, PLEASE CONTACT CIN: U28910PB1979PLC004008 CIN: U74140MH2010PTC204285 Mr. Vikas Thakur Ms. Ami Parekh / Mr. Chaitanya Satwe E: investor.relations@happyforgingsltd.co.in E: ami.parekh@sgapl.net / chaitanya.satwe@sgapl.net T: +91 99159 51913 T