Happy Forgings shares rise after Motilal Oswal initiates coverage

Happy Forgings shares: Happy Forgings shares surged nearly 5 per cent following the initiation of coverage by brokerage firm Motilal Oswal, which assigned a buy rating for target price of Rs 1,125, indicating a potential upside of 21% from Thursday's closing price.

Motilal Oswal's coverage highlighted Happy Forgings' strong presence and established position across various industries and customer segments, including heavy commercial vehicles, farm equipment, off-highway vehicles, and industrials. The company, founded in 1979 and based in Ludhiana and operates three vertically integrated manufacturing facilities and is well-positioned for growth through capacity expansion, product diversification, and client acquisition.

Happy Forgings has transitioned from manufacturing basic forged components to producing complex and safety-critical products with closed tolerances. Notably, it is one of the few companies in India equipped with a 14,000-ton forging press, allowing it to cater to the demands of top OEMs in the commercial vehicle and farm equipment industries.

Despite subdued near-term demand outlook in the commercial vehicle and tractor industries, Happy Forgings has demonstrated resilience and outperformed industry growth rates. The company's revenue growth, particularly in the industrial segment, has remained robust, reflecting its diversified customer base and reduced cyclicality, Motilal Oswal said.

Moreover, Happy Forgings is set to benefit from increased localisation efforts and favourable government policies aimed at promoting domestic sourcing. With a significant share of exports in its order book, the company anticipates a rise in export contributions in the coming years, the Mumbai-based brokerage said.

The successful installation of a 14,000-ton press has led to a surge in new order wins, particularly from the industrial segment, underscoring the company's growth prospects and utilization plans for the future, the brokerage added.

As of 10:40 am, Happy Forgings shares traded 3.22 per cent higher at Rs 956.70.