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Industrial Products company Happy Forgings announced Q4FY24 & FY24 results:
- Happy Forgings Limited has reported its audited financial results showcasing commendable growth, with the Board recommending a final dividend of Rs 4 per equity share for the financial year ending March 31, 2024.
- Q4FY24 revenue from operations rose by 14% YoY to Rs 343 crore.
- The company has achieved a 16% YoY growth in revenues in FY24. Operational excellence is evident through the enhanced EBITDA and PAT percentages of 28.5% and 17.9%, respectively.
- The return on equity (ROE) for FY24, after certain adjustments, stood resilient at 20.6%, while the return on capital employed (ROCE) after similar adjustments was robust at 26.9%.
- Happy Forgings has shown an impressive increase in the sale of machined products in FY24, which are higher in value, from 79% to 85%. Additionally, the industrial segment experienced significant growth, contributing 12% to the revenue, up from the previous year's 4%.
Commenting on the results, Ashish Garg, Managing Director said, “We closed FY24 on a positive note registering growth, margin improvement and further diversification of our revenue streams despite slowdown in key industry segments and the Red Sea crisis. We achieved 16% growth in revenues for FY24 driven by exports and industrials business segment.
Margins and profits grew substantially on YoY basis in FY24 as share of machined product sales increased from 79% to 85% of sales and together with favorable change in business mix, helped us improve our gross margins by ~3% and EBITDA margin by ~1.5%. Gross Margin stood at 56.1% and EBITDA improved to 28.5% despite increase in ESOP related costs and export freight costs. These margin improvements helped us achieve 22% growth in EBITDA and 27% growth in PAT on a YoY basis in FY24.
Revenue segment diversification continued as we marked an entry into the Passenger Vehicles segment in both domestic and export market in FY24. With recent order wins in this segment, we demonstrated our ability to expand our wallet share from existing customers, giving us good visibility to achieve the targeted contribution to sales from this segment in the next 2 years. We also witnessed a significant increase in the share of industrial segment from 4% to 12% and exports from 13% to 20% of revenues in FY24.
We continue to expand capacities and planned additions in forging and machining capacities are on track. Our balance sheet strength provides us the flexibility to capitalize on growth opportunities and further improve our returns profile as we deploy capital. The Board has recommended a dividend of Rs. 4 per share for FY24 which effectively means a payout of ~16%.
Looking ahead, we are confident in our ability to sustain this positive momentum and drive further growth and profitability and hope that improvement in underlying business segments will trigger additional growth.”
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