Heavy Forging Company Approves Rs 650 Crore Investment to Expand into Heavyweight Forged & Machined Components for Diverse Industrial Applications
The company's shares have an ROE of 23.5 per cent and an ROCE of 26.2 per cent
Happy Forgings Limited (HFL), a leading Indian manufacturer specializing in complex, high-precision forged components, has announced a significant investment of up to Rs 650 crore. This substantial capital expenditure will be used to establish advanced forging capabilities, specifically targeting the growing demand from various non-automotive industrial sectors. The new facility, set to be the first of its kind in Asia and the second largest globally, will focus on manufacturing heavy-duty forged and machined components.
This strategic move by HFL will enable the company to expand its product portfolio significantly. The focus will be on producing critical components such as large crankshafts for industrial and marine applications. Additionally, the facility will manufacture other essential components including axles, gears, oil & gas valves and flanges, spindles, connectors, and shafts. These components will find applications across a wide range of industries, including power generation, marine, mining, high-horsepower farm equipment, material handling, wind energy, oil & gas, and specialized sectors like aerospace, defence and nuclear.
With this investment, HFL will be venturing into the higher-weight segment, capable of producing components weighing up to 3,000 kilograms. This strategic enhancement of its forging capabilities will position HFL to effectively address niche applications within these industries that require high-quality, heavy-duty components. The company plans to finance this significant investment through a combination of internal accruals and debt, with the construction and commissioning of the new facility expected to take place over the next 2-3 years.
This substantial investment signifies HFL's commitment to innovation, scalability, and maintaining its position as a leader in forging and machining excellence. By expanding its manufacturing capabilities, HFL aims to solidify its position at the forefront of the global supply chain for heavyweight components. This strategic move will enable the company to effectively meet the increasing demand from diverse industrial and strategic sectors worldwide, ensuring continued growth and success in the years to come.
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About Happy Forgings Limited
The Company is one of the largest engineering-led manufacturers of complex and safety-critical, heavy forged and high precision machined components in India in terms of forgings capacity. The Company through its vertically integrated operations is 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 and passenger vehicles in the automotive sector, while in the non-automotive sector, caters 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. The company has a market cap of over Rs 9,000 crore. The company's shares have an ROE of 23.5 per cent and an ROCE of 26.2 per cent. Investors should keep an eye on this small-cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.