Happy Forging Limited · NSE:HAPPYFORGE
Happy Forging — Happy Forgings — Q1 FY25 Earnings Presentation
35 slides from Happy Forging's earnings presentation, Aug 7, 2024
Slide 1: Exchange filing cover letter for investor presentation
August 07, 2024 To BSE Ltd, National Stock Exchange of India Ltd. Corporate Relationship Department, Listing Department, Phiroze Jeejebhoy Towers, Exchange Plaza, Bandra-Kurla Complex, Dalal Street, Mumbai - 400 001 Bandra (East), Mumbai- 400 051 Scrip Code: 544057 Svmbol: HAPPYFORGE Sub : Presentat
Slide 2: Investor Presentation Q1FY25
INVESTOR PRESENTATION Q1FY25 1
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: Q1FY25 Performance Highlights
Q1FY25 Performance Highlights
Slide 5: Message from the Managing Director
MESSAGE FROM THE MANAGING DIRECTOR “I am pleased to present our performance for Q1FY25, marked by Revenue of Rs. 341 Crs, EBITDA of Rs. 98 Crs and PAT of Rs. 64 Crs. We achieved a YoY growth of ~3% in finished goods volume and ~4% increase in realisations (despite a reduction in raw material costs)
Slide 6: Q1FY25 Performance Highlights
Q1FY25 PERFORMANCE HIGHLIGHTS REVENUE (Rs. Crs) EBITDA (Rs. Crs) PAT (Rs. Crs) 30.4% / 29.1%* 28.6% 19.4%/18.4%* 18.7% +4% / +7%* -3% / +5%* 0% / +9%* 330 341 100 98 64 64 Q1FY24 Q1FY25 Q1FY24 Q1FY25 Q1FY24 Q1FY25 Margins * During Q1FY24, financials were favorably impacted by higher realisation on a
Slide 7: Volume & Realisation Trend
VOLUME & REALISATION TREND Q1FY25 Volume and Realisation Particulars Q1FY24 Q1FY25 YoY FY24 Finished Goods Volume (MT) 13,555 13,933 +2.8% 55,379 Realisation/Kg (Rs.) 243 245 +0.7%/+3.9%* 245 * During Q1FY24, revenue was favorably impacted by higher realisation on account of air freight costs receiv
Slide 8: Profit & Loss Statement
PROFIT & LOSS STATEMENT Consolidated P&L (Rs. Crs) Q1FY25 Q1FY24* YoY% FY24 Revenue from Operations 341 330 +3.5% 1,358 Raw Material cost & change in inventories 149 142 597 Gross Profit 193 188 +2.6% 762 Gross Profit Margin 56.5% 57.0% 56.1% Employee Cost 29 25 114 Other Expenses 66 63 260 EBITDA 9
Slide 9: Key Data Points
KEY DATA POINTS PRODUCT MIX SECTOR MIX* GEOGRAPHY MIX* Q1FY24 82% 18% Q1FY24 79% 21% 38% 42% 42% FY24 85% 15% FY24 80% 20% 34% 31% 31% 14% 13% 11% Q1FY25 87% 13% Q1FY25 82% 18% 14% 12% 12% 0% 1% 3% Q1FY24 FY24 Q1FY25 Automotive - Commercial Vehicles Forged products Machined products Exports Domestic
Slide 10: Driving Optimal Utilization and Efficiency
DRIVING OPTIMAL UTILIZATION AND EFFICIENCY Strategically adding capacity with a strong focus on capital efficiency 58% 56% 87% 85% 52,500 120,000 120,000 51,000 FY24 Q1FY25 FY24 Q1FY25* Forging Capacity (in MT) Machining (in MT) Utilisation Utilisation Figures represent Annual Capacity Note: Install
Slide 11: Consistency of Growth and Returns
CONSISTENCY OF GROWTH AND RETURNS 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 1.3 1.0
Slide 12: Company Overview
ra is HAPPY FORGINGS LIMITED Company Overview
Slide 13: 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 14: 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 15: 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 16: 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 17: 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 16
Slide 18: 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 19: 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 18
Slide 20: 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 21: 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 22: Ability to Install and Operate High Tonnage Presses and Precision Machining
HAVE DEMONSTRATED THE ABILITY TO INSTALL AND OPERATE HIGH TONNAGE PRESSES AND PRECISION MACHINING Total Forging Capacity* 1,20,000 MT Total Machining Capacity* Kanganwal I Kanganwal II Dugri 52,500 MT Started in 1995 Kanganwal, Ludhiana Started in 2006 Kanganwal, Ludhiana Started in 2021 Dugri, Ludh
Slide 23: Architects of Progress
ARCHITECTS OF PROGRESS Paritosh Kumar Narinder Singh Juneja Chairman & Managing Director CEO & Whole - Time Director • Has over 50 years of experience in the industrial sector • ~45 years of experience in the industrial sector • Holds a post diploma course in mechanical engineering (machine tools op
Slide 24: 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 25: Historical Financial Statements
2 4 Historical Financial Statements
Slide 26: Profit & Loss Statement
PROFIT & LOSS STATEMENT Profit and Loss (in Rs. Crores) 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 Margi
Slide 27: Balance Sheet
BALANCE SHEET Assets (in Rs. Crores) Mar’24 Mar’23 Mar’22 Equity & Liabilities (in Rs. Crores) 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
Slide 28: Cash Flow Statement
CASH FLOW STATEMENT Cash Flow Statement (Rs in Crores) 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
Slide 29: Impact Beyond Financial Performance
2 8 Impact Beyond Financial Performance
Slide 30: ESG Governance - Key Initiatives
ESG GOVERNANCE - KEY INITIATIVES ESG Governance Director’s Statement ESG Committee “We are at a pivotal stage in our organization’s growth path and committed to embrace robust frameworks and procedures that translate • A five-member body established in our core values into tangible actions marked by
Slide 31: 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 32: Social - Key Initiatives & Outcomes
SOCIAL - KEY INITIATIVES & OUTCOMES CSR Activities Children & Adolescents with Vocational Senior Citizen Healthcare Education special needs Training Environment Animal Welfare Welfare Defence Services Projects / ▪ 5 Dialysis ▪ Adopted a Govt. ▪ Funding to ▪ Contribution to Bal ▪ Punjab Agricultural
Slide 33: 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 34: Awards, Accreditations and Recognitions
AWARDS, ACCREDITATIONS AND RECOGNITIONS Gold award for “Superlative Performance in Agility” – 2024 Ashok Leyland Supplier Summit Received Next Level Quality award by Generac – 2023 (Received in 2024) 2024 Received Best Quality Award by Escorts Kubota Limited (2024) Received Supplier Excellence Award
Slide 35: For Further Information, Please Contact
34 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 5191