IPO Analysis: Happy Forging Ltd

IPO Analysis of Happy Forging Limited

Happy Forging Limited (“HFL”) was incorporated on July 2, 1979. HFL is the 4th largest engineering led manufacturer of complex and safety critical, heavy forged and high precision machined components in India as of Fiscal 2023 in terms of forgings capacity. They, through their vertically integrated operations, are engaged in engineering, process design, testing, manufacturing, and supply of a variety of components that are both margin accretive and value-additive.

The company primarily caters to domestic and global original equipment manufacturers (“OEMs”) manufacturing commercial vehicles in the automotive sector, while in the non-automotive sector, they cater to manufacturers of farm equipment, off-highway vehicles and manufacturers of industrial equipment and machinery for oil and gas, power generation, railways, and wind turbine industries. With over 40 years of experience of manufacturing and supplying quality and complex components according to customers specifications, HFL has emerged as a leading player in the domestic crankshaft manufacturing industry with the 2nd  largest production capacity for commercial vehicle and high horse-power industrial crankshafts in India. HFL manufactures a wide range of heavy forged and machined products which include crankshafts, front axle beams, steering knuckles, differential cases, transmission parts, suspension products and valve bodies across industries. HFL is among the few companies in India with the capability to manufacture and supply high precision safety critical components to leading OEMs including manufacturers of commercial vehicles, farm equipment, off-highway and industrial equipment and machinery for oil and gas, power generation, railways and wind turbine industries. As of March 31, 2023, they are only the 2nd company in India to have a 14,000-tonne forging press or higher forging press and are among the 4 companies in India that possess 8,000 tonne forging press or higher forging press.

Company’s focus on the high HP engine segment insulates them from any potential electric vehicle (“EV”) disruption as hydrogen, compressed natural gas (“CNG”) and liquified natural gas (“LNG”) combustion engine technologies are expected to become prominent alternate powertrain technologies in this segment and crankshaft as a product is compatible to such combustion engines with minimal/ no alterations. HFL is a supplier to each of the Top-5 Indian OEMs, by market share, in the medium and heavy commercial vehicle industry and 4 of the Top-5 Indian OEMs in the farm equipment industry by market share, in Fiscal 2023. Company’s strength in machining and overall value addition to products has enabled them to achieve the highest EBITDA margin among the peers in the last 2 Fiscals. They recorded an increase in their revenue from operations by 104.55% from ₹584.96 crore in Fiscal 2021 to ₹1,196.53 crore in Fiscal 2023. Happy Forgings Limited (“HFL”) is the 4th largest engineering led manufacturer of complex and safety critical, heavy forged and high precision machined components in India as of Fiscal 2023 in terms of forgings capacity. They, through their vertically integrated operations, are engaged in engineering, process design, testing, manufacturing, and supply of a variety of components that are both margin accretive and value-additive. They primarily cater to domestic and global original equipment manufacturers (“OEMs”) manufacturing commercial vehicles in the automotive sector, while in the non-automotive sector, they cater to manufacturers of farm equipment, off-highway vehicles and manufacturers of industrial equipment and machinery for oil and gas, power generation, railways, and wind turbine industries.

With over 40 years of experience of manufacturing and supplying quality and complex components according to customers specifications, HFL has emerged as a leading player in the domestic crankshaft manufacturing industry with the 2nd largest production capacity for commercial vehicle and high horse-power industrial crankshafts in India. Their revenue from sale of machined products has increased from ₹399.20 crore in Fiscal 2021 (representing 72.88% of their revenue from sale of products in such Fiscal) to ₹839.23 crore in Fiscal 2023 (representing 78.66% of the revenue from sale of products in such Fiscal), at a CAGR of 44.99% which demonstrates their increased focus on machined products. Company’s strength in machining and overall value addition to products has enabled them to achieve the highest EBITDA margin among the peers in the last 2 Fiscals (i.e., Fiscal 2022 and 2023). They recorded an increase in their revenue from operations by 104.55% from ₹584.96 crore in Fiscal 2021 to ₹1,196.53 crore in Fiscal 2023 and EBITDA in Fiscal 2023, 2022, 2021 and the 6 months ended September 30, 2022 and 2023, was ₹340.94 crore, ₹230.89 crore ₹158.75 crore, ₹181.86 crore and ₹195.21 crore respectively, and the EBITDA margin was 28.49%, 26.85%, 27.14%, 30.32% and 29.01%, respectively. HFL manufactures a wide range of heavy forged and machined products which include crankshafts, front axle beams, steering knuckles, differential cases, transmission parts, pinion shafts, suspension products and valve bodies across industries.

HFL is among the few companies in India with the capability to manufacture and supply high precision safety critical components to leading OEMs including manufacturers of commercial vehicles, farm equipment, off-highway and industrial equipment and machinery for oil and gas, power generation, railways and wind turbine industries.

Industry Research:

The global economy between calendar years 2014 and 2019 remained stable in the aftermath of the global financial crisis in 2008-2009 with an average growth rate of 3.4% and Asian countries like China and India being the highest-growing countries with a GDP growth rate of 7.4% and 7.3%, respectively. The interest rate by the central banks in the United States and Euro-Zone were cut down to near zero levels which infused credit in the global financial markets. The global economy saw a period of negative growth in 2020 due to a decline in productivity and output. Ukraine in February 2022. Supply-chain disruptions are getting better, while the impact to energy and food markets caused by the war is reducing. Simultaneously, the massive and synchronous tightening of monetary policy by most central banks should start to bear fruit, with inflation moving back toward its targets. Federal Reserve, the central bank of United States of America raised its interest rate from 0 to 0.25% before the Russia- Ukraine war to 5.50% in July 2023. The global growth is expected to bottom at 2.8% in 2023 and is expected to recover to 3.0% in 2024 due to growth in emerging markets.

The inflation during calendar years 2014 to 2017 remained relatively lower than pre-2014 levels majorly due to a decline in private spending, a decline in commodity prices and weaker wage growth in advanced economies. Increased globalisation led to a decrease in inflation in this period, Post 2017 there was a cold trade war between US and China which began the increase in inflation. Calendar year 2021 saw above-average inflation of 4.7% due to lockdowns and a decrease in production. Global inflation was 8.7% in calendar year 2022 due to supply chain bottlenecks, high energy prices and the impact of the Russia-Ukraine war. The same is set to fall to 7.0% in calendar year 2023 owing to a decrease in commodity prices and the reopening of China easing the supply chain bottlenecks. Global Inflation is expected to normalise to pre-pandemic level post-2025 and remain stable given higher borrowing rates keeping consumer spending in control. India CV production registered a growth of 4.5% CAGR from Fiscal 2014 to Fiscal 2023. Rising demand for pickup trucks, owing to the growing e-commerce and logistics sector is responsible for the growth in this period. HCV more than 16 tonnes registered the highest CAGR of 11.6% during Fiscal 2014 to Fiscal 2023 due to increased government expenditure on infrastructure, BS-VI transition and growth in mining and quarrying sector which is about 3% of the GDP. Global Auto component market is expected to register a growth of 3.7% CAGR during the period calendar year 2023 – calendar year 2029 due to increase in demand for passenger cars and commercial vehicles coupled with increasing trend towards personalisation. Manufacturing of auto components is gradually gaining traction toward Asian countries such as China and India due to the presence of higher market potential and low-cost manufacturing. China accounts for 40 – 50% share in global auto component industry supported by strong exports and domestic sales in the market.

Turnover of India automotive components Industry registered a growth of CAGR 7.7% over the period Fiscal 2014 to Fiscal 2023 with maximum contribution from exports with growth of CAGR 9.4% between Fiscal 2014 to Fiscal 2023 supported by the fact that India has a competitive advantage in categories such as shafts, bearings, and fasteners due to large number of players which is resulting in higher exports. Aftermarket and supply to OEMs also registered a growth of 8.0% and 7.1% CAGR respectively due to cost effective manufacturing base in India which keeps cost lower by 10-25% relative to operations in Europe and Latin America. Additionally, the robust manufacturing ecosystem, the easy availability of skilled labour and key raw materials, and strong government incentive schemes to promote ‘Make in India’ are all contributing to India’s emergence as a global manufacturing hub. Auto component market turnover is expected to show a significant growth of 10.6% CAGR in period Fiscal 2023 to Fiscal 2029 supported by increasing demand and government policies such as allowance of 100% FDI under the automatic route in the sector and Production Linked Incentive scheme for auto and auto components, which is expected to bring a capex of around US$ 9.58 billion by Fiscal 2029. Forging is a manufacturing process involving the shaping of a metal using compressive, localized forces delivered through hammering, pressing, or rolling. These compressive forces are delivered with a hammer or die. Forging is often categorized according to the temperature at which it is performed—cold, warm, or hot forging. The basic concept is that the original metal is plastically deformed to the desired geometric shape giving it higher fatigue resistance and strength. Some of the common materials used for forging are carbon steel, alloy steel, micro alloy steel, stainless steel, aluminium, and titanium.

Many automotive and non-automotive components are manufactured using forging process. In automotive and truck applications, forged components are commonly found at points of shock and stress. Cars and trucks may contain more than 250 forgings, most of which are produced from carbon or alloy steel. Forged engine and powertrain components include connecting rods, camshafts, crankshafts, transmission shafts and gears, differential gears, drive shafts, clutch hubs, universal joint yokes and crosses pinions, gears, rocker arms. Non- automotive applications are vast and some of them are valves and fittings used in oil and gas fields, stationary and shipboard internal combustion engine components, materials handling systems, conveyors, chain-hoist assemblies etc. The forging and machining market in the oil and gas industry is expected to grow in the coming years. The oil and gas industry requires a variety of forged and machined components such as valves, pumps, and drilling equipment.

The forging industry market size was about 216.2L MT in calendar year 2014 (US$ 52.2 billion) and increased gradually until calendar year 2018 to become 243.1L MT (US$ 62.3 billion) where highest volumes of automotive was registered in the given timeline. Ricardo estimates that from a 257.9L MT (US$ 68.8 billion) market in calendar year 2022, it would grow to a 328L MT (US$ 97 billion) market by calendar year 2029 with a CAGR of 3.6%. In Europe, there is some decline in the trend due to economic slowdown pertaining to geopolitical threats, supply shock triggered by raise in oil prices, but it would grow from 48L MT market in calendar year 2022 to 53.8L MT market in calendar year 2029 with slow growth until calendar year 2025 where stabilisation of European economy is expected. India would see a steady growth and volume would increase by 141%, 28.6L MT in calendar year 2022 to 40.6L MT in calendar year 2029 owing to government’s PLI scheme on automotive where a capex of US$ 9.58 billion is expected in phases before calendar year 2028. The automotive sector holds about 61% of forged components market share globally by volume as of calendar year 2022. In terms of value, automotive sector contribution to forged components was about US$ 35.4 billion in calendar year 2022 and it is estimated to grow as US$ 49.6 billion market in calendar year 2029 with a CAGR of 5.1%. The automotive forging market is expected to grow to 208.3L MT by calendar year 2029 with rise in demand of automotive globally backed by rise in global working population. The value of forged components in farm equipment sector is expected to grow fastest with a CAGR of 6.2% to US$ 3.9 billion in calendar year 2029. The industrial sector is undergoing a steady growth with investments in infrastructure by China, India and Southeast Asian countries and global supply chain re-alignments to move manufacturing to lower cost locations.

Product Line Of Company:

Crankshaft: The crankshaft is a critical part in an engine’s assembly that is connected to the piston on one side and the flywheel on the other. A crankshaft converts reciprocating motion of the pistons into rotational motion for the flywheel, which is in turn connected to the axles to put the vehicle in motion. The company offers customization to meet the specific needs of their clients. They leverage their manufacturing capabilities and technology to deliver single cylinder to 6-cylinder crankshafts with a weight range of 10 Kgs to 210 Kgs for commercial vehicles, farm equipment, off-highway vehicles and power generation industries.

• Differential case: A differential is a case of gears that sits between the axles in the front or rear of a vehicle. Differentials divide the power from the engine between the axles, allowing each wheel to be driven. Differentials allow the wheels to turn at different speeds, which is critical for safety and vehicle longevity. The company forges and machine differential cases with a weight range of 5 Kgs to 40 Kgs per piece and maintaining its wall thickness within specified parameters.

• Front Axle Beam: The front axle beam is a crucial component of a vehicle’s suspension system. It is responsible for supporting the weight of the front end of the vehicle and connecting the front wheels to the vehicle’s frame. The front axle beam is typically made of steel and is drop-forged to give it the necessary strength to withstand the weight of the vehicle and the stresses of driving. HFL forges front axle beams with a weight range of 70 Kgs up to 195 Kgs.

• Steering Knuckle: A steering knuckle is a part of the front suspension system in a vehicle that contains the wheel hub or spindle and attaches to the suspension and steering components. HFL forges steering knuckles with a weight range 27 Kgs to 45 Kgs.

• Planetary Carrier: A planetary carrier is a part of an automatic transmission or other gear reduction system that helps control how power is transmitted from the engine to the wheels. It’s like a hub with arms that hold smaller gears called planet gears. The planetary carrier helps to change the gear ratio, which affects how fast the wheels turn in relation to the engine’s speed. Use cases for planetary carriers include automatic transmissions in cars, trucks, and other vehicles, gearbox for windmill, as well as gear reduction systems in industrial equipment, such as conveyor belts and cranes. HFL forges and machine planetary carrier with a weight range of 5 Kgs to 45 Kgs per piece.

• Pinion Shaft: The pinion shaft is a component that connects to the wind turbine rotor and transmits the rotational energy to the gearbox, enabling optimal performance of the wind turbine. Company’s pinion shafts are manufactured using processes such as spline cutting, ensuring precise and accurate design. They forge pinion shafts with a weight range of 84 Kgs to 200 Kgs per piece.

• Housing: The housing is a protective casing that encloses and supports the internal components of the gearbox, safeguarding them against environmental factors and ensuring optimal performance. They use advanced machines to achieve accuracy through broaching and spline cutting processes. They forge housing products with a weight range of 35 Kgs to 105 Kgs per piece.

• Suspension Brackets and Brake Flanges: HFL manufactures suspension products, including forged brake flanges and rear axle suspension brackets. Suspension brackets play a crucial role in maintaining stability, absorbing bumps and vibrations, and providing a smooth ride for the vehicle whereas brake flanges are responsible for providing a stable and secure attachment for the braking components, allowing them to rotate smoothly and safely. HFL forges and machine suspension brackets with a weight range of 5 Kgs to 16 Kgs per piece.

• Transmission Parts: HFL manufactures a wide range of high-quality transmission components, including crown wheel, ring gears and shaft. They offer components suitable for both manual and automatic transmissions. They forge transmission products with a weight range of 5 Kgs to 95 Kgs per piece.

• Valve Body: A valve body is a critical component of a valve that controls the flow of fluid or gas through a pipeline. Company’s valve body is designed to withstand the harsh conditions of the oil and gas industry, including high pressures, temperatures, and corrosive environments. They use stainless steel to forge their valve bodies, which ensures that they can withstand extreme environmental conditions. Use cases for their valve bodies include oil and gas pipelines, chemical processing plants, and other industrial applications where the control of fluid or gas flow is critical. HFLforges valve bodies with a weight range of 45 Kgs to 90 Kgs per piece.

Bush: A type of bearing used to support a rotating shaft to absorb shock and reduce wear between moving parts. The purpose of a bush in railway engineering is to prevent metal-to-metal contact, reduce wear and tear, and ensure smooth and efficient operation of railway components.

Camshafts: It is a rotating shaft located inside the engine cylinder head. They control the opening and closing of the valves in an internal combustion engine.

Investment Rationale:

1. Fourth largest engineering led manufacturer of complex and safety critical, heavy forged and high precision components

With over 40 years of experience of manufacturing and supplying quality and complex components, the Company is well established within the industries and customers they cater to. In terms of forging capacity as of Fiscal 2023, they are the fourth largest engineering led manufacturer of complex and safety critical, heavy forged and high precision machined component in India. Further, they have emerged as a leading player in the domestic crankshaft manufacturing industry with the second largest production capacity for commercial vehicle and high horse-power industrial crankshafts. They are focused on developing heavier high precision critical and value added products for multiple end-use industries, which typically have extremely closed tolerances.

2. Diversified business model, well placed to take advantage of potential alternative engine technologies

Company’s business model is well diversified by end use industry and customer base. In automotive sector, they derive their revenues from OEMs of commercial vehicles. Within the non-automotive sector, they manufacture and supply a wide range of precision components to OEMs of farm equipment, off-highway vehicles, and industrial machinery and equipment for oil and gas, power generation, railways and wind turbine industries. They have a geographically diversified revenue base with their business footprint which spans across geographies. As of September 30, 2023, they served customers in over nine countries including Brazil, Italy, Japan, Spain, Sweden, Thailand, Turkey, the United Kingdom and the United States of America.

3. Integrated manufacturing operations coupled with in-house product

The Company’s journey from manufacturing basic forged and machined components to manufacturing complex and safety critical products with closed tolerances, involved expansion of their capabilities in both light and heavy forging and machining. They expanded their capabilities to manufacture complex and safety critical parts, resulting in a diverse product portfolio of machined parts such as crankshaft, transmission parts, suspension products and other products for commercial vehicles, farm equipment, and off-highway vehicles. In addition, they also expanded their capabilities to manufacture and supply components with applications in industries including oil and gas, power generation, railways and wind turbines.

4. Long-standing relationship with customers across industries

HFL has a diversified customer base and they have served 66 customers in Fiscal 2023 and 59 customers in the 6 months ended September 30, 2023. As of September 30, 2023, they served customers in over 9 countries. They have established longstanding relationships with several Indian and global customers across industries. They have long-standing relationships, on average, of more than 14 years with their Top-10 customers (in terms of revenue from sale of products in Fiscal 2023) as of March 31, 2023. They also extend their existing product offerings to the counterparts of their existing customers located in different geographical regions which helps them improve volumes of such products which in turn helps them better leverages.

5. Track record of consistently building capabilities and infrastructure, with focus on capital Efficiency

As of the date of this Red Herring Prospectus, the Company operates three manufacturing facilities with two manufacturing facilities located at Kanganwal in Ludhiana, Punjab, and one located at Dugri in Ludhiana, Punjab. As of March 31, 2023, the annual aggregated installed capacity for forging and machining was 107,000.00 MT and 46,100.00 MT, respectively and the capacity utilisation was 62.96% and 79.24% in Fiscal 2023, respectively. Over the years they have invested in expanding and upgrading their manufacturing facilities which are equipped to undertake a variety of processes, including engineering and designing, hammer and press forging, metallurgical testing, heat treatment, machining and dimensional testing among others, enabling them to manufacture a wide range of products majorly weighing between 3 kilograms to 250 kilograms.

6. Experienced Promoters and senior management team

The company promoter, Chairman and Managing director Paritosh Kumar founded the company in 1979 and continues to provide guidance and oversees overall performance of the company. The company benefits from the experience of their management team which has extensive knowledge in the precision components’ manufacturing industry, including operations, business development and customer relationships. Their relationships with the institutional investor MO Alternates through its fund India Business Excellence Fund-III, has supported them with capital allocation and strategic business advice

7. Healthy financial performance

The company has the highest EBITDA margin among peers in the last 2 Fiscals (i.e., Fiscal 2022 and 2023). They recorded the highest ROCE among peers in Fiscal 2023. They have utilized their resources prudently, and that their operational and financial performance will allow them to take advantage of the growth opportunities in the industry

8. Foray into lightweight forging and machining with introduction of aluminium components

The use of lightweight materials is a growing trend in various industries. The automotive industry, in particular, is driving this trend due to the increasing demand for fuel-efficient vehicles. The aerospace and defence industries are also adopting lightweight materials to improve performance and reduce costs. HFL intends to diversify their product portfolio by entering into the market of lightweight forging and machined components. In particular, they aim to introduce aluminium forging and machined components to cater to the growing demand for lightweight materials in various industries such as automotive, aerospace, and defence.

9. Capitalising increasing demand from international markets to grow exports

India is poised to become a global hub for manufacturing, driven by a confluence of factors such as the China plus one strategy, the Ukraine-Russia crisis, high production costs in Europe, and the India’s status as the lowest-cost producer in the world after China. HFL recognizes the immense opportunity presented by this rapidly evolving landscape and they are committed to leverage their engineering and machining strengths to tap into this opportunity. They aim to leverage the increasing demand from international markets to enhance their exports.

10. Expand capacity of existing manufacturing facilities

The company proposes to purchase new machineries and equipment to build up additional capacity for their forging and machining operations from the Net Offer Proceeds. Some of these new machineries will allow them to provide contingent backup to existing customers who they serve with their 8,000 and 14,000 tonne presses. The installation of new machinery and equipment will enable them to increase their production capacity, scale their operations and onboard new customers.

11. Grow inorganically through strategic acquisitions and alliances

In terms of strategic acquisitions, the company intends to explore and consider opportunities that can create synergies between the target companies and them and are in line with their growth strategy. in 2008, they purchased and relocated a crankshaft production line from an automotive manufacturer from Sweden through a trading firm to manufacture crankshafts for various applications. Similarly in 2022, they purchased and relocated machineries used to manufacture crankshaft from another automotive manufacturer from Germany through another trading firm.

Management Profile:

Paritosh Kumar is the Chairman and Managing Director of our Company. He holds a bachelor’s degree in arts from S.C. Dhawan Government (Evening) College, Ludhiana, Panjab University. He has over 44 years of experience in the industrial sector. He was awarded with the ‘LMA-Vardhman Award for entrepreneur of the year- 2018’ by the Ludhiana Management Association. He is involved in the strategic decision making of our Company, oversees our Company’s business activities and is involved in setting up the governance standards of our Company.

Ashish Garg is a Managing Director of our Company. He holds a bachelor’s degree in science (accounting and finance), and a master’s degree in science (manufacturing systems engineering) from the University of Warwick, United Kingdom. He has approximately 17 years of experience in the industrial sector. He currently manages our Company’s business operations, financial performance, growth strategies and investments in different capacities and product developments.

Megha Garg is a Whole-time Director of our Company. She holds a bachelor’s degree in science (economics) from the University of Nottingham, United Kingdom. She has approximately eight years of experience in the industrial sector. She currently handles the online digital marketing of our Company to engage prospects and capture leads.

Narinder Singh Juneja is the Chief Executive Officer and Whole-time Director of our Company. He holds a post diploma course in mechanical engineering (machine tools operation and maintenance) from Y.M.C.A. Institute of Engineering, State Board of Technical Education, Haryana. He has over 35 years of experience in the industrial sector. Prior to joining our Company, he served as the assistant engineer with Krishna Forgings.

Prakash Bagla is the Nominee Director of our Company. He holds a bachelor’s degree in commerce from Calcutta University and is an associate member of the Institute of Chartered Accountants of India. He has 18 years of experience in the finance and private equity sector. He joined MO Alternates in 2007 and is responsible for deal sourcing, investing, monitoring and managing exits. He focuses on businesses in the industrials and niche manufacturing sectors, and represents India Business Excellence Fund-III, on the Board of our Company. He is also on the board of other companies namely VVDN Technologies Private Limited, Simpolo International Private Limited, Simpolo Vitrified Private Limited, Nexion International Private Limited, Magicrete Building Solutions Private Limited and Glass Wall Systems (India) Private Limited. He is currently designated as managing director at MO Alternates.

Satish Sekhri is an Independent Director of our Company. He holds a bachelor’s degree in science (mechanical engineering) from University of Delhi, and a master’s degree in business administration from Department of Commerce and Business Management, Panjab University. He has experience in the field of sales and marketing and the industrial sector. He is currently on the board of Harita Fehrer Limited, JK Files and Engineering Limited and Rico Auto Industries Limited.

Vikas Giya is an Independent Director of our Company. He holds a bachelor’s degree in commerce from G.G.N. Khalsa College, Punjab University. He is a fellow member of the Institute of Chartered Accountants of India. He has over 17 years of experience in the finance sector. He is serving as a full time partner in Anup Kumar Jain and Co., Chartered Accountants since December 15, 2005.

Ravindra Pisharody is an Independent Director of our Company. He holds a bachelor’s degree in technology (electronics and electrical communication engineering) from Indian Institute of Technology, Kharagpur, a post graduate diploma in management from Indian Institute of Management, Calcutta, and a post graduate program in executive coaching from Coaching Foundation India Limited. He has over 18 years of experience in marketing. Prior to joining our Company, he served as an executive director on the board of Tata Motors Limited, and as a marketing director with BP India Private Limited.

Rajeswari Karthigeyan is an Independent Director of our Company. She holds a bachelor’s degree in commerce from Faculty of Commerce, University of Madras, a diploma in systems management from the Academic Council of the National Institute of Information Technology, and an independent directors certificate program (a part time certificate programme) from the Indian Institute of Management, Bangalore. She has over 30 years of experience in the credit ratings sector. Prior to joining our Company, she served as an associate director of CRISIL Ratings Limited.

Atul Behari Lall is an Independent Director of our Company. He holds a master’s degree in management studies from the Birla Institute of Technology and Science, Pilani. He has more than 29 years of experience in the electronics manufacturing services industry. He has served as a member of the Technical Evaluation Committee for Electronic Manufacturing Services (EMS) under M-SIPS constituted by the DeitY and served as a representative of ELCINA on the Committee for Reliability of Electronic and Electrical Components and Equipment (LITD. 02) of the Bureau of Indian Standards. He has also authored the book, ‘Gita and India Inc.’. He is currently a managing director on the board of Dixon Technologies (India) Limited.

Financials:

Balance sheet

Profit & Loss

Cash Flow

Valuation & Opinion:

Happy Forgings’s diversified product portfolio, coupled with its focus on margin-accretive and value-additive products along with expanding production capacities and increasing export coupled with capitalisation of international market and better penetration of product in different countries, has contributed to its transition from a forging-led business to a leading player in the machined components manufacturing industry. It also serves a wide range of industries, including automotive, farm equipment, off- highway vehicles, and industrial machinery for oil and gas, power generation, railways, and wind turbine sectors. At the upper price band of IPO company looks fairly valued for long term perspective.

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