Happy Forging Limited · NSE:HAPPYFORGE
Happy Forging — Happy Forgings — Q4 FY24 Earnings Presentation
38 slides from Happy Forging's earnings presentation, May 26, 2024
Slide 1: Cover letter to exchanges: revised investor presentation
May 26, 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: HAPPYFO
Slide 2: Investor Presentation Q4 & FY24
INVESTOR PRESENTATION Q4 & 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: Q4 & FY24
Performance Highlights: Q4 & FY24
Slide 5: Message from the Managing Director
MESSAGE FROM THE MANAGING DIRECTOR We closed FY24 on a positive note registering growth, margin improvement and further diversification of our revenue streams despite slowdown in key industry segments and the Red Sea crisis. We achieved 16% growth in revenues for FY24 driven by exports and industria
Slide 6: Q4 & FY24 Financial Highlights
Q4 & FY24 FINANCIAL HIGHLIGHTS Figures (Rs. in Cr) REVENUE FROM OPERATIONS EBITDA & EBITDA% PAT & PAT% 28.4% 28.3% 16.8% 19.2% 14% 343 13% 302 97 86 30% Q4 FY24 66 51 Q4FY23 Q4FY24 Q4FY23 Q4FY24 Q4FY23 Q4FY24 27.0%* 28.5% 16.3%* 17.9% 16%* 22%* 1,358 1,173 317 388 27%* FY24 243 191 FY23* FY24 FY23*
Slide 7: Volume & Realisation Trend
VOLUME & REALISATION TREND Annual Volume and Realisation Trend Q4FY24 Volume and Realisation Finished Goods Volume (MT) Realisation/Kg (Rs.) EBITDA/Kg (Rs.) FY24 YoY Change Particulars Q4FY23 Q4FY24 YoY 232 245 +6% FG Volume (MT) 12,955 13,457 +4% 201 165 +12% Realisation/Kg 233 255 +9% 70 (Rs.) 54
Slide 8: Order Wins: Driving Growth and Success
ORDER WINS: DRIVING GROWTH AND SUCCESS Product Crankshaft Brake Flange E Axle Components Existing Customer Existing Customer Existing Customer Customer A large Indian automobile A large leading global Tier 1 A leading global manufacturer and Type manufacturer of a diverse range of manufacturer of au
Slide 9: Key Data Points
KEY DATA POINTS PRODUCT MIX SECTOR MIX GEOGRAPHY MIX 4% 12% 13% 20% 16% 43% 13% 42% 79% 85% 37% 80% 31% 87% 1% 21% 15% FY23 FY24 FY23 FY24 Automotive - Commercial Vehicles FY23 FY24 Automotive - Passenger Vehicles Non-Automotive - Farm Equipments Forged Products Machined Products Non-Automotive - Of
Slide 10: Profit & Loss Statement
PROFIT & LOSS STATEMENT Consolidated (in Rs. Crs) Q4 FY24 Q4 FY23 YoY Q3 FY24 QoQ FY24 FY23* YoY Revenue from Operations 343 302 14% 342 0% 1,358 1,197 14% Raw material cost & change in inventories 149 137 152 597 551 Gross Profit 194 166 17% 190 2% 762 645 18% Gross Profit Margin 56.5% 54.9% 55.5%
Slide 11: Balance Sheet
BALANCE SHEET Assets (in Rs. Crs) Mar 31, 24 Mar 31, 23 Equity & Liabilities (in Rs. Crs) Mar 31, 24 Mar 31, 23 Non-Current Assets 1,145 836 EQUITY 1,612 988 Property, Plant and Equipment 742 677 Equity Share Capital 19 18 Capital work-in-progress 122 75 Other Equity 1,594 970 Intangible Assets 1 1
Slide 12: Cash Flow Statement
CASH FLOW STATEMENT Cash Flow Statement (Rs in Cr) FY24 FY23* Profit Before Tax 324 280 Adjustments for Depreciation and other items 72 71 Operating profit before working capital changes 396 351 Changes in working capital -123 -78 Cash generated from operations 273 273 Direct taxes paid (net of refu
Slide 13: 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% 19.9% 25.7% 18.7% 21.1% 21.8% 14.4% 16.7% FY21 FY22 FY23 FY24* FY21 FY22 FY23 FY24* FIXED ASSETS TURNOVER^ NET DEBT/EBITDA 1.4 1
Slide 14: Company Overview
Company Overview
Slide 15: 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, FY24 FY
Slide 16: Vision Mission Statement
VISION MISSION STATEMENT VISION To be amongst the top 10 forging and machining companies globally MISSION State-of-the-art Technology Deliver more than promised Respect and encourage people Inspire innovation and creativity Care for the environment and society
Slide 17: Business Evolution Spanning Over Four Decades
BUSINESS EVOLUTION SPANNING OVER FOUR DECADES Established a single unit Initiated installation of 8,000-tonne Commissioned the second HFL achieved a milestone by getting for manufacturing bicycle forging press and model grinding for listed on the NSE and BSE 8,000-tonne press crank arms 4/6-cylinder
Slide 18: Fully Integrated Capabilities
FULLY INTEGRATED CAPABILITIES Forging Machining Die Design & Manufacturing Fully automated forging Advanced software and equipment to Latest technology and tools to offer a wide range of press lines and hammers to produce high- ensure that our machining processes services, including design, prototyp
Slide 19: Complete Process Flow
COMPLETE PROCESS FLOW Covered Raw Material Yard Billet Cutting Section Metallurgical Testing Lab Forging Machining Heat Treatment Control Cooling Standard Room Final Inspection Packaging & Dispatch 18
Slide 20: Multi-Product and Multi-Industry Offerings (1/2)
MULTI-PRODUCT AND MULTI-INDUSTRY OFFERINGS (1/2) Commercial Vehicles Power Generation Suspension Rear Axle Products Front Axle Component Components Crankshaft Differential Case Crankshaft Farm Equipment Windmill Applications Crankshaft Crown Wheel Housing Planet Carrier Output Shaft Axle Shaft Pinio
Slide 21: Multi-Product and Multi-Industry Offerings (2/2)
MULTI-PRODUCT AND MULTI-INDUSTRY OFFERINGS (2/2) Off-highway Vehicles Oil & Gas Crankshaft Valve Bodies Bucket Link Passenger Vehicles Railways Crankshafts Piston Pin Connecting Rod Brake Flange E Axle Components 20
Slide 22: 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 23: 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 24: 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 25: 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% 58% 71% 78% Significant manufacturing capacities act as an 120,000 51,000 entry barrier for other manufa
Slide 26: Architects of Progress
ARCHITECTS OF PROGRESS Paritosh Kumar Garg Narinder Singh Juneja Chairman & Managing Director CEO & Whole - Time Director • Has over 50 years of experience in the industrial sector • 44+ years of experience in the industrial sector • Holds a post diploma course in mechanical engineering (machine too
Slide 27: 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 28: Historical Financial Statements
Historical Financial Statements
Slide 29: Profit & Loss Statement
PROFIT & LOSS STATEMENT Profit and Loss (in Rs. Crs) FY24 FY23* FY22 Revenue from Operations 1,358 1,197 860 Cost of Materials Consumed 597 551 388 Gross Profit 762 645 472 Gross Profit Margin (%) 56.1% 53.9% 54.8% Employee Cost 114 88 69 Other Expenses 260 217 172 EBITDA 388 341 231 EBITDA Margin (
Slide 30: Balance Sheet
BALANCE SHEET Assets (in Rs. Crs) Mar’24 Mar’23 Mar’22 Equity & Liabilities (in Rs. Crs) Mar’24 Mar’23 Mar’22 Non-Current Assets 1,145 836 704 EQUITY 1,612 988 788 Property, Plant and Equipment 742 677 455 Equity Share Capital 19 18 18 Capital work-in-progress 122 75 212 Other Equity 1,594 970 770 I
Slide 31: Cash Flow Statement
CASH FLOW STATEMENT Cash Flow Statement (Rs in Cr) Mar’23 Mar’23 Mar’22 Profit before tax 324 280 192 Adjustments for depreciation and other items 72 71 40 Operating profit before working capital changes 396 351 232 Changes in working capital -123 -78 -109 Cash generated from operations 273 273 123
Slide 32: Impact Beyond Financial Performance
Impact Beyond Financial Performance
Slide 33: ESG Governance - Key Initiatives
ESG GOVERNANCE - KEY INITIATIVES ESG Governance Director’s Statement Formation of ESG Committee “We are at a pivotal stage in our organization’s growth path A five-member body established in March 2024 and committed to embrace robust frameworks and headed by the Whole-time Director procedures that t
Slide 34: Governance - A Diverse Board with Strong Independent Directors
GOVERNANCE - A DIVERSE BOARD WITH STRONG INDEPENDENT DIRECTORS Director (Name, Age & Experience) Areas of Expertise Key Board Memberships & associations (Current & past) Key Board Highlights 74 ▪ Sales & marketing and ▪ Current: JK Files & Engineering Ltd. and Rico Auto Industries Diverse Board in t
Slide 35: Social - Key Initiatives & Outcomes
SOCIAL - KEY INITIATIVES & OUTCOMES Organizational Highlights Multiple CSR initiatives 3.2 2.1 2.8 Year-end staff count % staff < 30 Yrs. 1.4 Amount spent on CSR 3,017 32% initiatives (Rs. Cr.) 2,938 FY2021 FY2022 FY2023 FY2024 Job Creation Area Funding support in FY24 for Beneficiaries / Outcomes F
Slide 36: Environment - Our Commitments and Key Initiatives
ENVIRONMENT – OUR COMMITMENTS AND KEY INITIATIVES Our Commitments Environment Centric Initiatives 50% Reduction in Scope 1 and Scope 2 carbon emissions by 2030 5MW capacity Solar power plants installed at our manufacturing facilities 50% Reduction Scope 2 1,600 kVAR Hybrid Automatic power factor con
Slide 37: 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 38: For Further Information, Please Contact
COMPANY INVESTOR RELATIONS ADVISOR FOR FURTHER INFORMATION, PLEASE CONTACT CIN: L28910PB1979PLC004008 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