Happy Forgings shares have delivered exceptional returns, hitting a new 52-week high of ₹2,484.30 on September 1, 2026, representing an 84.93% gain in calendar year 2026. The stock has been on a remarkable upward trajectory, reflecting positive market sentiment toward the company's robust order book and growth prospects. As per Motilal Oswal, the stock has delivered around 120% return in one year and is currently trading at ₹2,139 per share with a market capitalisation of ₹20,187.61 crore. The brokerage maintains a 'Buy' rating with a target price of ₹2,438, indicating an 18% upside potential.
The ₹9.5 billion order book is expected to drive majority of topline growth over FY27-29, with PVs and industrials accounting for 70% of the order book. Around 60% of the order book is export-linked, providing diversified revenue streams and stability. While PVs and Industrials currently contribute 24% to revenue, management expects their contribution to rise to 45-50% over the medium term. These orders are secured at higher realizations and better margins, which, combined with the captive solar project, is expected to drive structural margin expansion over FY26-29. The PV mix is on track to reach 14% of the mix in a couple of years, while the domestic tractors segment outlook has improved following GST rate cuts announced in September.
The company demonstrated strong operational performance in Q1FY27, with volumes growing 23% year-on-year and revenue increasing 27%. Despite headwinds from raw material costs, EBITDA margin rose 280 basis points year-on-year to 31.3%, aided by price hikes and favorable product mix. The management expects high-teens volume growth in FY27 and anticipates domestic demand to remain robust with improving export momentum. FY27 EBITDA margin is expected to remain at the FY26 level of 30.4%, with scope for expansion as steel cost pass-through effects materialize in Q2FY27.
According to Motilal Oswal's analysis, while there could be some margin pressure due to rising input costs in the near term, the brokerage expects Happy Forgings to post a margin expansion to 33% by FY29 from 31% currently. This expansion is anticipated to be led by an improved product mix, operating leverage benefits, and benefits from solar power generation in the coming years. The captive solar project, which will come on stream in FY28, is expected to contribute significantly to the structural margin improvement. The combination of new order wins, higher realizations, improving mix, and operating leverage is expected to drive strong earnings growth over the forecast period. Motilal Oswal expects the company to record revenue/EBITDA/profit after tax CAGR of 25%/28%/30% over FY26-29.
The next phase of growth would be supported by capacity additions across high-growth segments of passenger vehicles, industrial applications, heavy engines and data centre power infrastructure. Against the planned ₹650 crore capital expenditure for heavy forgings, the company has already deployed ₹250 crore, with an additional ₹150 crore planned in FY28. Further investments will hinge on incremental order wins and customer requirements. The stock has a return on equity (ROE) of 19.14% and has shown remarkable volatility, touching its 52-week high of ₹2,484.30 and 52-week low of ₹890.05 during the past year. The current trading range reflects the stock's strong performance trajectory amid ongoing market dynamics.
