Earnings Update: Happy Forgings Limited (NSE:HAPPYFORGE) Just Reported And Analysts Are Trimming Their Forecasts

Shareholders might have noticed that Happy Forgings Limited (NSE:HAPPYFORGE) filed its quarterly result this time last week. The early response was not positive, with shares down 9.9% to ₹930 in the past week. Happy Forgings reported ₹3.5b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of ₹6.84 beat expectations, being 2.1% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Happy Forgings after the latest results.

See our latest analysis for Happy Forgings

Taking into account the latest results, the consensus forecast from Happy Forgings' three analysts is for revenues of ₹16.9b in 2026. This reflects a major 21% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 23% to ₹34.63. Before this earnings report, the analysts had been forecasting revenues of ₹18.5b and earnings per share (EPS) of ₹37.57 in 2026. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.7% to ₹1,202. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Happy Forgings at ₹1,250 per share, while the most bearish prices it at ₹1,140. This is a very narrow spread of estimates, implying either that Happy Forgings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Happy Forgings'historical trends, as the 16% annualised revenue growth to the end of 2026 is roughly in line with the 18% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 14% per year. It's clear that while Happy Forgings' revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Happy Forgings. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Happy Forgings. Long-term earnings power is much more important than next year's profits. We have forecasts for Happy Forgings going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Happy Forgings has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.