Happy Forgings IPO Financial Analysis

What does the Company do?

For a variety of clients and industries, the firm designs, develops, and tests a wide range of goods, including valve bodies, steering knuckles, differential housings, transmission components, pinion shafts, suspension items, and crankshafts.

What are their major Clients?

1. Mahindra & Mahindra Limited, 
2. Meritor HVS AB, 
3. Meritor Heavy Vehicle Systems Cameri SPA, 
4. SML ISUZU Limited, 
5. Bonfiglioli Transmissions Private Limited, 
6. Dana India, 
7. IBCC Industries (India) Private Limited, 
8. International Tractors Limited, 
9. JCB India Limited, 
10. Liebherr CMCtec India Private Limited, and others.

Customers from Brazil, Italy, Japan, Spain, Sweden, Thailand, Turkey, the United Kingdom, and the United States of America have been served by the firm.

What are the Product Portfolio?

Whom does it cater?

What are the Competitive Strength?

1. Following competitive strengths have positioned company to benefit from market dynamics & capture projected growth in the forging & machined components industry.
2. Fourth largest engineering led manufacturer of complex and safety critical, heavy forged and high precision mahined components in India. 
3. Integrated manufacturing operations coupled with in-house product and process design capabilities resulting in a diverse product portfolio with continuous value addition. 
4. Diversified business model, well placed to take advantage of potential alternative engine technologies. 
5. Long-standing relationship with customers across industries. 
6. Track record of consistently building capabilities and infrastructure, with focus on capital efficiency. 
7. Experienced Promoters and senior management team Track record of healthy financial performance.
    

Financial Summary

Analysis

• Assets

The company's assets have been consistently increasing over the years, from ₹ 876 cr. in March 2021 to ₹ 1326 cr. in March 2023 and further to 1490 by September 2023. This indicates growth in the company's resource base.

• Revenue

The revenue shows an increasing trend from ₹ 591 cr. in March 2021 to 1202 in March 2023, but there is a notable decrease to ₹ 676 cr. by September 2023. We can ignore it because it is ofq aurter earlier.

• Profit After Tax

The profit after tax has also been increasing, which is a positive sign. It has grown from ₹ 86 cr.in March 2021 to 209 in March 2023. However, there is a slight decrease to ₹ 119 cr. by September 2023, which should be analyzed to understand the reasons behind the decline.

• Net Worth

The net worth of the company has been increasing consistently, indicating that the company is building value. It has grown from ₹ 645 cr. in March 2021 to ₹ 988 cr in March 2023 and further to ₹ 1103 cr. by September 2023.

• Reserves and Surplus

The reserves and surplus, which represent retained earnings, have also shown growth over the period. This is a positive sign as it indicates the company is retaining and accumulating profits.

• Total Borrowing

Total borrowing has increased from ₹ 153 cr. in March 2021 to ₹ 259 cr. by September 2023. While this can provide funds for expansion, an increase in debt should be monitored to ensure it is sustainable and doesn't adversely affect the company's financial health.

In summary, the company seems to be experiencing overall growth, with increasing assets, revenue, and profitability. However, the dip in revenue and profit in September 2023 and the increase in total borrowing should be cAnaarefully examined. It's crucial to identify the reasons behind these changes and assess whether they represent short-term fluctuations or potential long-term issues. Additionally, a more detailed analysis, such as ratio analysis, would provide a more comprehensive understanding of the financial health of the company.