Indian component manufacturer achieves record profit margins through diversification strategy while navigating slowdown in key commercial vehicle segment
17 May 2025 | 493 Views | By Angitha Suresh
Happy Forgings Limited, one of India's largest manufacturers of heavy forged and precision machined components, reported a 10.1% increase in profit after tax to INR 267 crores for the financial year ended March 31, 2025. The Ludhiana-based company announced its results on May 17, showing revenue growth of 3.7% to ...
This is an Autocar Pro Plus article. Subscribe to continue reading.
Happy Forgings Limited, one of India's largest manufacturers of heavy forged and precision machined components, reported a 10.1% increase in profit after tax to INR 267 crores for the financial year ended March 31, 2025. The Ludhiana-based company announced its results on May 17, showing revenue growth of 3.7% to INR 1,409 crores despite challenges in multiple market segments.
The company achieved its best-ever profit margins in FY25, with gross profit margin of 58.0%, EBITDA margin of 28.9%, and profit after tax margin of 19.0%. For the fourth quarter, revenue increased 2.5% year-on-year to INR 352 crores, while EBITDA grew 5.3% to INR 102 crores.
The board of directors has recommended a dividend of Rs. 3 per share for FY25, representing a payout ratio of approximately 11%.
"This performance reflects our resilience driven by a strategic focus on business diversification, expansion into new verticals, and the pursuit of higher value-add business," said Ashish Garg, Managing Director of Happy Forgings Limited. The company secured new orders worth over Rs. 1,600 crores in the passenger vehicle and industrial segments during the year.
Happy Forgings demonstrated progress in its diversification strategy, reducing its dependence on the commercial vehicle segment, which declined to 38% of revenue in FY25 from 43% in the previous year. The industrial segment increased its contribution to 14% from 11%, while passenger vehicles grew to 4% from 1%.
The company maintained a strong balance sheet with liquidity of Rs. 356 crores and a debt-to-equity ratio of 0.1x, supported by operating cash flow generation of approximately Rs. 290 crores during the fiscal year.
Volume of finished goods increased by 2.8% to 56,906 metric tons, while realization per kilogram stood at Rs. 248, representing a 0.9% increase over the reported figure for FY24.
The positive results came despite significant challenges, including a double-digit decline in international commercial vehicle, farm equipment, and off-highway segments, a domestic slowdown in the medium and heavy commercial vehicle segment, and falling steel prices.
Founded in Ludhiana, Punjab, Happy Forgings has established itself as a key supplier to domestic and global original equipment manufacturers. The company produces critical components for automotive, farm equipment, off-highway, and industrial sectors including oil and gas, power generation, railways, and wind turbine industries. Machined products contributed 87% of the company's output during the fiscal year.