Happy Forgings Ltd (HAPPYFORGE) Q2 FY27 Results Analysis: Revenue Surges 32.7%, Rs. 500 Cr Expansion Cleared

Cofacto Research Published November 05, 2026 3 min read

Positive

Happy Forgings Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 500.75 Cr (+32.70% YoY) and PAT growth of +32.80% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quick Details

Results date	November 05, 2026
Revenue (Q2)	Rs. 500.75 Cr (+32.70% YoY)
PAT (Q2)	Rs. 97.50 Cr (+32.80% YoY)
EBITDA margin	30.58% (-10 bps YoY)
EPS (Q2)	Rs. 10.33 (+32.60% YoY)

Quarter Snapshot

Happy Forgings delivered Rs.500.75 Cr revenue (+32.7% YoY, first quarter above Rs.500 Cr) with PAT up 32.8% and EBITDA margin of 30.58% meeting management's guidance of FY26-level margins. The Board approved a Rs.500 Cr capacity expansion for FY28–FY29 backed by the order book. The soft spot is cash quality: H1 CFO was 0.66x PAT with an Rs.88.79 Cr receivables build and negative FCF of Rs.252.84 Cr amid the capex program.

Q2 FY27 Expectations vs Results

Driver	Expected before results	What happened	Verdict
Domestic demand	"strongest in the series… supportive of the guided 'high teen' FY27 volume growth"	Revenue +32.7% YoY, +11.4% QoQ	Played out
Margin vs sector	"holding >30% would be against the sector grain"	EBITDA margin 30.58% (vs 30.44% FY26), though −76 bps QoQ	Played out
Price-increase capture	"first full quarter of the 4.5–5% OEM increases"	Gross margin 60.83% (Q1: 60.68%; Q2 FY26: 60.32%); realisation not disclosed	Partially
Steel spike / inventory buffer	inventory stock "converting some of that rise into inventory gains"	Changes in inventories −Rs.13.77 Cr (build); inventories only Rs.234.84 vs Rs.232.76 Cr	Partially
Freight/CV-export drag	"delayed DDP volumes likely flowed through only partially"	Filing silent; receivables +Rs.92.91 Cr H1 is the only echo	Not observable
Solar / M&A clock	call questions	Not addressed in the filing — remain open for the call	Not observable

Read our full results preview.

Management Guidance vs Delivery

What management said	Where	What happened	Verdict
EBITDA margin "broadly in line with FY26 levels (30.4%), with potential for further improvement" — FY27	Q1 FY27 earnings call (Aug 5, 2026)	30.58% (Q2); 30.94% (H1) vs 30.44% FY26	Met
EBITDA margin "upwards of 30% going forward"	Q1 FY27 earnings call (Aug 5, 2026)	30.58%	Met
FY27 capex Rs.450–500 Cr (also Rs.350–400 Cr/yr)	Q4 FY26 call (May 22, 2026) / Q1 FY27 call	Rs.377.52 Cr deployed in H1	On Track
Forging 161,000 t / machining 82,000 t by FY27	Q4 FY26 call (May 22, 2026)	158,000 MT / 82,000 MT at Sep-30-26	On Track
Solar 35 MW "operational from January onwards"	Q1 FY27 earnings call	Not addressed in the filing	Too Early

Key Investment Insights

Key Positives

Revenue of Rs.500.75 Cr crossed Rs.500 Cr for the first time, +32.7% YoY and +11.4% QoQ, with growth accelerating from +27.0% YoY in Q1 FY27
PAT grew 32.8% YoY to Rs.97.50 Cr; EPS grew 32.6% to Rs.10.33
EBITDA margin of 30.58% met management's guidance of broadly FY26 levels (30.44%) and 'upwards of 30%'; H1 margin 30.94% is +127 bps YoY
Employee cost leverage improved YoY (8.16% of revenue vs 8.94%)
Board approved a Rs.500 Cr capacity expansion (~24,000 MT forging, ~14,000 MT machining) phased FY28–FY29, order-book backed
Capex of Rs.377.52 Cr in H1 is on track vs the FY27 guide of Rs.450–500 Cr
Q2 PAT margin of 19.47% was not flattered by disclosed one-time items; other income fell 25.1% QoQ

Risk Factors

H1 CFO of Rs.124.46 Cr was 0.66x PAT and 0.42x EBITDA, driven by an Rs.88.79 Cr trade receivables build
FCF was negative Rs.252.84 Cr in H1 as capex outpaced operating cash generation
Raw material ratio rose 241 bps YoY to 41.92% on the steel price surge; other expenses rose to 22.09% of revenue from 20.69% (+41.7% YoY)
EBITDA margin declined 76 bps QoQ to 30.58% and 10 bps YoY
Total borrowings rose to Rs.528.70 Cr from Rs.329.62 Cr (D/E 0.15x to 0.23x) to fund expansion