Happy Forgings Ltd (HAPPYFORGE) Q1 FY27 Results Analysis: PAT Surges 39%, EBITDA Margin Expands 275 bps

Happy Forgings Ltd's Q1 FY27 numbers came in strong, with revenue of Rs. 449.42 Cr (+27.03% YoY) and PAT growth of +39.23% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Happy Forgings delivered strong Q1 FY27 results with 27% YoY revenue growth and 39% PAT growth, driven by robust domestic demand and operating leverage. EBITDA margin expanded 275 bps YoY to 31.34%, within the medium-term guidance band. The company is well-positioned to benefit from continued demand momentum and capacity additions, though raw material cost pass-through and rising depreciation remain near-term headwinds.

Key Investment Insights

Key Positives

• Revenue grew 27.03% YoY to Rs.449.42 Cr, accelerating from 3.6% YoY growth in Q1 FY26.
• PAT grew 39.23% YoY to Rs.91.46 Cr, driven by operating leverage.
• EBITDA margin expanded 275 bps YoY to 31.34%, at the top end of the medium-term guidance band.
• EBITDA grew 39.27% YoY to Rs.140.86 Cr, outpacing revenue growth.
• Credit rating reaffirmed at AA(Stable)/A1+ for Rs.485 Cr bank facilities.
• Strong domestic demand backdrop with tractor sales up 27% YoY and PV sales at record levels.

Risk Factors

• Raw material cost as a percentage of revenue rose to 41.79% from 37.28% QoQ due to steel pass-through lag.
• Finance costs increased 33.04% YoY to Rs.3.06 Cr, reflecting higher borrowings for capex.
• Depreciation and amortization expense grew 27.69% YoY to Rs.26.24 Cr, consistent with capex capitalization.