Happy Forging Limited · NSE:HAPPYFORGE
Happy Forging — Happy Forgings — Q3 FY25 Earnings Presentation
36 slides from Happy Forging's earnings presentation, Feb 7, 2025
Slide 1: Exchange filing cover letter
February 07, 2025 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 : Present
Slide 2: Investor Presentation Q3 & 9MFY25
INVESTOR PRESENTATION Q3 & 9MFY25 1
Slide 3: Safe Harbor
SAFE HARBOR This presentation and the accompanying slides (the “Presentation”), prepared by Happy Forgings Limited (the “Company”), are intended solely for information purposes and does not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not
Slide 4: Q3 & 9MFY25 Performance Highlights
Q3 & 9MFY25 Performance Highlights
Slide 5: Message from the Managing Director
MESSAGE FROM THE MANAGING DIRECTOR "I am pleased to report that we closed Q3 & 9MFY25 with positive business momentum, successfully navigating industry headwinds and the impact of declining raw material prices. During this period, the underlying CV industry contracted in both domestic and export mar
Slide 6: Q3 & 9MFY25 Performance Highlights
Q3 & 9MFY25 PERFORMANCE HIGHLIGHTS Financials Revenue From Operations EBITDA & EBITDA % PAT & PAT % in Rs Crs 27.8% 28.6% 16.9% 18.2% 3.6% 6.6% 11.5% 354 101 342 95 65 Q3FY25 58 Q3FY24 Q3FY25 Q3FY24 Q3FY25 Q3FY24 Q3FY25 4.1%/5.5%* 28.6%/28.1%* 28.8% 17.5%/ 17.0%* 18.9%/ 18.4%^ 1,015 1,057 4.8%/ 8.2%
Slide 7: Volume & Realisation Trend
VOLUME & REALISATION TREND 9MFY25 Volume and Realisation Particulars 9MFY24* 9MFY25 YoY FY24 Finished Goods Volume (MT) 41,922 42,564 +1.5% 55,379 Realisation/Kg (Rs.) 242/239* 248 +2.6%/+3.9%* 245/243* Realisation improved by Rs. ~9/kg YoY* in 9MFY25 despite a fall in raw material costs during the
Slide 8: Profit & Loss Statement
PROFIT & LOSS STATEMENT (In Rs. Crs) Q3FY25 Q3FY24 YoY 9MFY25^ 9MFY24* YoY FY24 Revenue from Operations 354 342 3.6% 1,057 1,015 4.1% 1,358 Raw Material cost & change in inventories 149 152 446 447 597 Gross Profit 205 190 8.3% 611 568 7.6% 762 Gross Profit Margin 58.0% 55.5% 249bps 57.8% 55.9% 186b
Slide 9: Key Data Points
KEY DATA POINTS PRODUCT MIX SECTOR MIX * GEOGRAPHY MIX ^ 11% 14% 19% 19% 14% 42% 38% 84% 12% 88% 33% 32% 81% 81% 0% 4% 16% 12% 9MFY24* 9MFY25 9MFY24^ 9MFY25 9MFY24 9MFY25 Automotive - Commercial Vehicles Automotive - Passenger Vehicles Forged Products Machined Products Exports Domestic Non-Automotiv
Slide 10: Driving Optimal Utilization and Efficiency
DRIVING OPTIMAL UTILIZATION AND EFFICIENCY Strategically adding capacity with a strong focus on capital efficiency 87% 85% 58% 57% 57,000 127,000 120,000 51,000 FY24 9MFY25 FY24 9MFY25 Forging Capacity (in MT) Machining (in MT) Utilisation Utilisation Note: Figures represent Annual Capacity. 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% 25.7% 19.9% 18.7% 21.1% 21.8% 16.3% 16.7% 18.3% 14.4% FY21 FY22 FY23 FY24 H1FY25 FY21 FY22 FY23 FY24 H1FY25 FIXED ASSETS TURNOVER^ NE
Slide 12: Expansion into Heavyweight Components to Propel the Next Leg of Growth
EXPANSION INTO HEAVYWEIGHT COMPONENTS TO PROPEL THE NEXT LEG OF GROWTH Capex Details… Financial & Strategic Impact… QUANTUM & Upto Rs. 650 Crs, to be spread over next 2-3 years Capabilities and Segment Leadership FUNDING primarily to be financed through internal accruals o Expand into the higher-wei
Slide 13: Company Overview
is HAPPY FORGINGS LIMITED Company Overview
Slide 14: 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 15: 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 16: 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 17: 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 18: 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 17
Slide 19: 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 20: 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 19
Slide 21: 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 22: 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 23: Demonstrated Ability to Install and Operate High Tonnage Presses
HAVE DEMONSTRATED THE ABILITY TO INSTALL AND OPERATE HIGH TONNAGE PRESSES AND PRECISION MACHINING Total Forging Capacity* 127,000 MT Total Machining Capacity* Kanganwal I Kanganwal II Dugri 57,000 MT Started in 1995 Kanganwal, Ludhiana Started in 2006 Kanganwal, Ludhiana Started in 2021 Dugri, Ludhi
Slide 24: Architects of Progress
ARCHITECTS OF PROGRESS Paritosh Kumar Narinder Singh Juneja Chairman & Managing Director Chief Operating Officer • 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 operat
Slide 25: 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 26: Historical Financial Statements
Historical Financial Statements
Slide 27: Profit & Loss Statement
PROFIT & LOSS STATEMENT Profit and Loss (in Rs. Crs) 9MFY25^ FY24 FY23 FY22 Revenue from Operations 1,057 1,358 1,197 860 Cost of Materials Consumed 446 597 551 388 Gross Profit 611 762 645 472 Gross Profit Margin (%) 57.8% 56.1% 53.9% 54.8% Employee Cost 93 114 88 69 Other Expenses 214 260 217 172
Slide 28: Balance Sheet
BALANCE SHEET Assets (in Rs. Crs) Sep 30, 24 Mar 31, 24 Mar 31, 23 Mar 31, 22 Equity & Liabilities (in Rs. Crs) Sep 30, 24 Mar 31, 24 Mar 31, 23 Mar 31, 22 Non-Current Assets 1,225 1,144 836 704 EQUITY 1,711 1,612 988 788 Property, Plant and Equipment 884 742 677 455 Equity Share Capital 19 19 18 18
Slide 29: Cash Flow Statement
CASH FLOW STATEMENT Cash Flow Statement (Rs in Crs) Sep 30, 24 Mar 31, 24 Mar 31, 23 Mar 31, 22 Profit before tax 183 324 280 192 Adjustments for depreciation and other items 31 72 71 40 Operating profit before working capital changes 214 396 351 232 Changes in working capital -51 -123 -78 -109 Cash
Slide 30: Impact Beyond Performance
2 9 Impact Beyond Performance
Slide 31: 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 32: 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. Diverse Board in terms of professional and
Slide 33: Social - Key Initiatives & Outcomes
SOCIAL - KEY INITIATIVES & OUTCOMES Children & CSR Vocational Training Senior Citizen Defence & Law Healthcare Education Adolescents with Environment Animal Welfare Activities & Livelihoods Welfare Enforcement special needs Projects / ▪ 15 Dialysis Machines ▪ Adopted a Govt. ▪ Funding to Ludhiana ▪
Slide 34: Environment - Our Commitments and Key Initiatives
ENVIRONMENT – OUR COMMITMENTS AND KEY INITIATIVES Our Commitments Environment Centric Initiatives 50% Reduction in Scope 1 and Installed squeezing press to recover cutting oil from grinding residue enabling reuse of Scope 2 carbon emissions by 2030 the oil in machining process thereby reducing hazar
Slide 35: Awards, Accreditations and Recognitions
AWARDS, ACCREDITATIONS AND RECOGNITIONS Quality Performance Award FY24 for excellent performance in incoming parts quality by Ashok Leyland Gold award for “Superlative Performance in Agility” – 2024 Ashok Leyland Supplier Summit Received Next Level Quality award by Generac – 2023 (Received in 2024)
Slide 36: For Further Information, Please Contact
35 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