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Last Updated on: 14 November, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo
Stock Ticker - BSE: 544057 | NSE: HAPPYFORGE

Happy Forgings Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: November 11, 2024, 2:05 pm

Market Cap 10,611 Cr.
Current Price 1,126
High / Low1,300/813
Stock P/E41.0
Book Value 182
Dividend Yield0.35 %
ROCE22.7 %
ROE18.7 %
Face Value 2.00
PEG Ratio-0.80

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for Happy Forgings Ltd

Competitors of Happy Forgings Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Happy Forgings Ltd 10,611 Cr. 1,1261,300/81341.0 1820.35 %22.7 %18.7 % 2.00
EL Forge Ltd 63.7 Cr. 31.335.2/9.1525.8 11.60.00 %%% 10.0
CIE Automotive India Ltd 18,262 Cr. 481628/40122.3 1631.04 %18.3 %20.3 % 10.0
Amforge Industries Ltd 16.6 Cr. 11.617.2/6.50 8.830.00 %3.55 %3.17 % 2.00
Tirupati Forge Ltd 541 Cr. 52.252.2/11.066.8 4.810.00 %18.3 %15.0 % 2.00
Industry Average14,353.88 Cr421.8150.72142.470.31%12.37%15.20%5.92

All Competitor Stocks of Happy Forgings Ltd

Quarterly Result

MonthDec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Sales294302330343342343341
Expenses221217230249247246244
Operating Profit738610094959798
OPM %25%28%30%27%28%28%29%
Other Income2231378
Interest3534411
Depreciation16141516171618
Profit before tax56688574788786
Tax %26%25%25%25%25%25%26%
Net Profit42516455586664
EPS in Rs4.655.677.166.176.156.986.78

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024TTM
Sales5507505585858601,1971,3581,370
Expenses413545416426629856971986
Operating Profit137205142159231341388384
OPM %25%27%26%27%27%28%29%28%
Other Income4176661319
Interest222325127121210
Depreciation2329283638546567
Profit before tax9615596117192280324325
Tax %39%38%17%26%26%25%25%
Net Profit58958086142209243243
EPS in Rs738.381,066.26893.18965.9215.9023.3225.7926.08
Dividend Payout %0%0%0%0%0%6%5%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2018-20192019-20202020-20212021-20222022-20232023-2024
YoY Net Profit Growth (%)63.79%-15.79%7.50%65.12%47.18%16.27%
Change in YoY Net Profit Growth (%)0.00%-79.58%23.29%57.62%-17.93%-30.92%

Happy Forgings Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 6 years from 2018-2019 to 2023-2024.

Growth

Compounded Sales Growth
10 Years:%
5 Years:13%
3 Years:32%
TTM:9%
Compounded Profit Growth
10 Years:%
5 Years:21%
3 Years:41%
TTM:22%
Stock Price CAGR
10 Years:%
5 Years:%
3 Years:%
1 Year:%
Return on Equity
10 Years:%
5 Years:19%
3 Years:20%
Last Year:19%

Last Updated: Unknown

Balance Sheet

Last Updated: Unknown

MonthMar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Equity Capital8999181819
Reserves1764705506367709701,594
Borrowings301156105150240219143
Other Liabilities928510079102119130
Total Liabilities5767197638741,1301,3261,886
Fixed Assets285291275415456678744
CWIP9461094021275127
Investments03000000
Other Assets2823523784194615731,015
Total Assets5767197638741,1301,3261,886

Reserves and Borrowings Chart

Cash Flow

MonthMar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity +1361695080209189
Cash from Investing Activity +-162-119-59-166-172-469
Cash from Financing Activity +27-501083-37281
Net Cash Flow1-01-3-01

Free Cash Flow

MonthMar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Free Cash Flow-164.0049.0037.009.00-9.00122.00245.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days1148290103949496
Inventory Days111106111176173112137
Days Payable48305355423234
Cash Conversion Cycle177158148225226175199
Working Capital Days12310694157146120141
ROCE %32%19%18%22%26%23%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthDec 2023Mar 2024Jun 2024
Promoters78.60%78.60%78.60%
FIIs2.06%1.12%2.24%
DIIs5.83%16.92%16.69%
Public13.50%3.35%2.47%
No. of Shareholders1,34,83993,58774,090

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
Kotak Small Cap Fund - Regular Plan1,594,8911.08189.8193,8252024-11-13722.85%
DSP Small Cap Fund708,0950.5184.27193,8252024-11-13265.33%
SBI Flexi Cap Fund543,0000.2864.62193,8252024-11-13180.15%
SBI Infrastructure Fund450,0001.1253.55193,8252024-11-13132.17%
HSBC Small Cap Fund - Regular Plan385,1250.2745.83193,8252024-11-1398.7%
Aditya Birla Sun Life Flexi Cap Fund333,2860.1739.66193,8252024-11-1371.95%
Edelweiss Recently Listed IPO Fund280,4093.4733.37193,8252024-11-1344.67%
Axis Small Cap Fund275,2870.1432.76193,8252024-11-1342.03%
Aditya Birla Sun Life Business Cycle Fund193,8251.2323.07193,8252024-11-130%
Aditya Birla Sun Life Manufacturing Equity Fund142,0351.4216.9193,8252024-11-13-26.72%

ROCE / ROE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22
FaceValue2.002.002.00
Basic EPS (Rs.)26.7823.3215.90
Diluted EPS (Rs.)26.7523.3215.90
Cash EPS (Rs.)32.6629.3720.11
Book Value[Excl.RevalReserv]/Share (Rs.)171.17110.4388.00
Book Value[Incl.RevalReserv]/Share (Rs.)171.17110.4388.00
Revenue From Operations / Share (Rs.)144.18133.6996.09
PBDIT / Share (Rs.)42.5638.7426.47
PBIT / Share (Rs.)35.6832.6822.26
PBT / Share (Rs.)34.4331.2921.46
Net Profit / Share (Rs.)25.7923.3215.90
NP After MI And SOA / Share (Rs.)25.7923.3215.90
PBDIT Margin (%)29.5128.9727.55
PBIT Margin (%)24.7524.4423.16
PBT Margin (%)23.8823.4022.32
Net Profit Margin (%)17.8817.4416.54
NP After MI And SOA Margin (%)17.8817.4416.54
Return on Networth / Equity (%)15.0621.1118.06
Return on Capital Employeed (%)20.4427.3422.51
Return On Assets (%)12.8815.7312.59
Long Term Debt / Equity (X)0.000.050.09
Total Debt / Equity (X)0.080.220.30
Asset Turnover Ratio (%)0.840.970.00
Current Ratio (X)3.071.911.74
Quick Ratio (X)2.141.250.98
Inventory Turnover Ratio (X)3.203.100.00
Interest Coverage Ratio (X)34.0427.7933.10
Interest Coverage Ratio (Post Tax) (X)21.6317.7320.87
Enterprise Value (Cr.)8392.350.000.00
EV / Net Operating Revenue (X)6.180.000.00
EV / EBITDA (X)20.930.000.00
MarketCap / Net Operating Revenue (X)6.160.000.00
Price / BV (X)5.190.000.00
Price / Net Operating Revenue (X)6.160.000.00
EarningsYield0.020.000.00

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of Happy Forgings Ltd as of November 14, 2024 is: 1,400.28

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

As of November 14, 2024, Happy Forgings Ltd is Undervalued by 24.36% compared to the current share price 1,126.00

Intrinsic Value of Happy Forgings Ltd as of November 14, 2024 is: 679.97

Calculation basis:

  • Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of November 14, 2024, Happy Forgings Ltd is Overvalued by 39.61% compared to the current share price 1,126.00

Last 5 Year EPS CAGR: -51.44%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a high average ROCE of 20.00%, which is a positive sign.
  2. The company has higher reserves (738.00 cr) compared to borrowings (187.71 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (413.25 cr) and profit (198.13 cr) over the years.
  1. The stock has a high average Working Capital Days of 126.71, which may not be favorable.
  2. The stock has a high average Cash Conversion Cycle of 186.86, which may not be favorable.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Happy Forgings Ltd:
    1. Net Profit Margin: 17.88%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 20.44% (Industry Average ROCE: 12.37%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 15.06% (Industry Average ROE: 15.2%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 21.63
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 2.14
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 41 (Industry average Stock P/E: 50.72)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 0.08
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company - Qualitative Analysis

Forgings
INDUSTRYADDRESSCONTACT
B-XXIX, 2254/1, Kanganwal Road, Ludhiana Punjab 141120Mr.Paritosh%20Kumar
Chairman%20&%20Managing%20Director
Management
NamePosition Held
Mr. Ashish GargManaging Director
Mr. Narinder Singh JunejaWholeTime Director & CEO
Ms. Megha GargWhole Time Director
Mr. Satish SekhriIndependent Director
Mr. Vikas GiyaIndependent Director
Mr. Atul Behari LallIndependent Director
Ms. Rajeswari KarthigeyanIndependent Director
Mr. Ravindra PisharodyIndependent Director

FAQ

What is the latest intrinsic value of Happy Forgings Ltd?

The latest intrinsic value of Happy Forgings Ltd as on 13 November 2024 is ₹1400.28, which is 24.36% higher than the current market price of ₹1,126.00.

What is the Market Cap of Happy Forgings Ltd?

The Market Cap of Happy Forgings Ltd is 10,611 Cr..

What is the current Stock Price of Happy Forgings Ltd as on 13 November 2024?

The current stock price of Happy Forgings Ltd as on 13 November 2024 is ₹1,126.

What is the High / Low of Happy Forgings Ltd stocks in FY 2024?

In FY 2024, the High / Low of Happy Forgings Ltd stocks is 1,300/813.

What is the Stock P/E of Happy Forgings Ltd?

The Stock P/E of Happy Forgings Ltd is 41.0.

What is the Book Value of Happy Forgings Ltd?

The Book Value of Happy Forgings Ltd is 182.

What is the Dividend Yield of Happy Forgings Ltd?

The Dividend Yield of Happy Forgings Ltd is 0.35 %.

What is the ROCE of Happy Forgings Ltd?

The ROCE of Happy Forgings Ltd is 22.7 %.

What is the ROE of Happy Forgings Ltd?

The ROE of Happy Forgings Ltd is 18.7 %.

What is the Face Value of Happy Forgings Ltd?

The Face Value of Happy Forgings Ltd is 2.00.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Happy Forgings Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE