Buy call on Happy forgings

“Happy Forgings is a company headquartered in Ludhiana, specializing in a variety of forging and machining services. With more than forty years of experience in the industry, it produces and supplies high-quality, intricate components. It holds the distinction of being the fourth-largest engineering-led manufacturer in India, focusing on complex and safety-critical heavy forged and high-precision machined components. The company has a strong presence in the sectors and customer segments it caters to, including heavy commercial vehicles (which account for 41% of its revenues), farm equipment (32%), off-highway vehicles (14%), and industrials (13%). Established in 1979, Happy Forgings operates entirely from Ludhiana, Punjab, with three integrated manufacturing facilities. It is well-positioned for growth in the coming years, driven by expansion efforts such as increasing capacities, diversifying its product range, acquiring new clients, and exploring opportunities in industrial sectors and exports.
Analysts expect a Compound Annual Growth Rate (CAGR) of 21%, 25%, and 30% respectively in standalone revenues, Earnings Before Interest, Taxes, Depreciation, and Amortization, and Profit After Tax from FY24E to FY26E. They have initiated coverage on the stock with a BUY rating and set a Target Price (TP) of approximately INR1,125, based on a multiple of 26 times the estimated Earnings Per Share (EPS) for FY26.”