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    Goodluck India Limited

    GOODLUCK
    Capital Goods·23 Jul 2025
    Management Summary

    Goodluck India reported a strong Q1 FY26 with robust growth in revenue, EBITDA, and PAT, primarily driven by domestic sales and expansion in value-added products. Despite global geopolitical volatility and a subdued export market, the company maintained resilience. The new defence vertical is awaiting a production license, and management is optimistic about recovery in export volumes and continued growth in infrastructure and solar segments, targeting 15-20% top-line growth for FY26.

    Highlights

    5

    • Income from operations rose by 7.7% year-on-year, reaching ₹983.29 crores, reflecting continued focus on operational excellence.

    • Overall volume grew by 12%, with the value-added sector increasing by 24% Y-o-Y in Q1 FY26.

    • PAT increased by 16.50% year-on-year to ₹40.14 crores, and EBITDA grew by 23.4% to ₹95.78 crores.

    • Earnings per share (EPS) stood at ₹12.60 in Q1 FY26, up from ₹10.80 in Q1 FY25.

    • The solar structure segment is projected to achieve 100% growth this year, and the hydraulic tube unit is making significant capacity utilization inroads.

    Concerns

    4

    • The global landscape remains highly complex and volatile due to ongoing geopolitical tensions and a prevailing tariff war scenario, particularly under the Trump administration.

    • Domestic demand was muted, and export markets remained subdued in Q1 FY26, leading to no export growth in the quarter.

    • The defence production license is still pending with the government, causing delays in starting production for the new vertical.

    • Steel prices are very volatile, and there was a general slowdown in the Indian market in the latter half of the quarter due to money supply crunch and government funds not flowing.

    Key financials

    Single quarter

    06 metrics
    1. 01Income from Operations₹983.29 Cr+7.7%YoY
    2. 02EBITDA₹95.78 Cr+23.4%YoY
    3. 03EBITDA Margin9.7%
    4. 04PAT₹40.14 Cr+16.5%YoY
    5. 05EPS₹12.6+16.7%YoY

    Segment breakdown

    Value-added sector
    24% Growth
    Non-value-added sector
    0% Growth
    Defence (Forging division)
    2% Revenue Contribution₹30 Cr Revenue Amount
    Hydraulic Tube
    50% Q1 Utilization₹1,250 Cr Potential Revenue (90% utilization)
    List

    Order Book

    medium confidence

    Composition

    Defence shells (M107, 155mm)(product)
    1,50,000 shells per annum

    Pipeline

    other

    LOIs available for defence products

    "Management is confident that orders for defence products will be 'x times' what they produce once the license is secured, but no specific order book value is disclosed."

    Source:
    Q&A

    Capital allocation

    2
    medium confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Debt disclosed

    Guidance & targets

    13
    CategoryTargetPriority
    Revenue
    Top line growth
    15-20%
    		High
    Revenue
    Defence plant revenue at full capacity
    ₹270-300 crores
    		Medium
    Revenue
    Hydraulic tube revenue at 90% utilization
    ₹1,250-1,300 crores
    		Medium
    EBITDA Margin
    Overall EBITDA margin
    9.5-9.7%
    		High
    Capacity Utilization
    Defence plant utilization
    40-50%
    		Medium
    Capacity Utilization
    Defence plant utilization
    90%
    		Medium
    Capacity Utilization
    Hydraulic tube utilization
    70%
    		Medium
    Sales Volume Growth
    Infrastructure sector sales volume growth
    20%
    		High
    Sales Growth
    Solar structure segment sales growth
    100%
    		High
    Finance Cost
    Overall finance cost
    ₹90 crores
    		High
    Depreciation
    Overall depreciation
    ₹60 crores
    		High
    ROCE
    Return on Capital Employed
    above 22-25%
    		Medium
    Company Size
    Become a $1 billion company
    $1 billion
    		Low

    What to watch in Q2 FY26

    5

    Defence production license approval

    As soon as possible, expected early
    CurrentPending with government
    TargetApproved and production commenced

    Why it matters

    Crucial for the new defence vertical to start operations and contribute to revenue, unlocking long-term value.

    Ram Agarwal: "We are awaiting the government clearances to start the production. From our side, nothing is pending. But yes, there is some time which government is taking. As per the regulations, whenever it comes, we will start."

    Risks & concerns

    7
    RiskSeverity

    Global geopolitical tensions

    Ongoing conflicts (Russia-Ukraine, Middle East, India-Pakistan) create a complex and volatile trade environment. — Management acknowledged

    high

    Prevailing tariff war scenario

    Shift in trade policy under Trump administration affects export markets and creates unpredictable dynamics. — Management acknowledged

    high

    Muted domestic demand

    Indian domestic demand has gone down in the second half of the quarter, impacting overall growth. — Management acknowledged

    medium

    Government procedural delays for defence license

    Delay in securing the license for defence production prevents the new vertical from becoming operational. — Management acknowledged

    medium

    Steel price volatility

    Prices are very volatile due to geopolitical tensions and Trump tariffs, impacting raw material costs. — Management acknowledged

    medium

    Slowdown in Indian market (money supply, government funds)

    Money supply crunch, government funds not flowing, and government orders not flowing out affected demand in the later half of Q1. — Management acknowledged

    medium

    Seasonal slowdown in Q1

    Rains, traffic, and movement of goods slow down in Q1, leading to a seasonal dip in demand. — Management acknowledged

    low

    Q&A highlights

    8

    “Mahesh Chandra Garg: "Those who are importing steel, they are only affected by BIS certification. Nobody can import known BIS steel from anywhere. But domestically, they are already having BIS certified material. There is no implication for us. ... Competition will be less with imported material.”

    Clarifies that BIS certification benefits domestic players by reducing import competition, which is positive for Goodluck India.

    asked by Riddhesh Gandhi

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 FY26 Financial Performance Overview

    Goodluck India reported a strong start to FY26 with income from operations rising 7.7% year-on-year to ₹983.29 crores. This growth was primarily driven by a 12% increase in overall volume and a 24% surge in the value-added sector. The company's PAT grew by 16.5% to ₹40.14 crores, while EBITDA saw a 23.4% increase to ₹95.78 crores, resulting in an EBITDA margin of 9.74%. EPS for the quarter stood at ₹12.60.

    02

    Strategic Development in Defence Vertical

    The company has established a new subsidiary, Goodluck Defence and Aerospace, and set up a plant for manufacturing M107, 155mm shells with a capacity of 150,000 shells per annum. This new vertical has a potential revenue of ₹270-275 crores at full utilization. However, the commencement of production is contingent on securing a government license, which is currently pending due to procedural delays. Management is optimistic about receiving the license soon and has LOIs available for tie-ups.

    03

    Market Dynamics and Challenges

    The global landscape remains highly complex and volatile, marked by geopolitical tensions and a prevailing tariff war, particularly impacting export markets. This led to subdued export performance and no growth in exports during Q1 FY26. Domestically, the company observed muted demand in the latter half of the quarter due to factors like money supply crunch and government funds not flowing. Steel prices also remained highly volatile, adding to market uncertainty🌐.

    04

    Segmental Growth Drivers and Capacity Expansion

    Despite challenges, Goodluck India is targeting a 20% increase in sales volume in the infrastructure sector for FY26. The solar structure segment is poised for 100% growth this year, driven by transmission tubes. The hydraulic tube sector, launched in September '24, achieved 50% utilization in Q1 and aims for 70% utilization by FY26, with a potential revenue of ₹1,250-1,300 crores at 90% utilization. The company continues its strategy of debottlenecking across all plants to enhance capacity, including expanding infrastructure capacity from 1 lakh to 150,000 tonnes.

    05

    Financial Outlook and Capital Allocation

    Goodluck India maintains its guidance for 15-20% top-line growth for FY26 and expects to sustain an overall EBITDA margin in the range of 9.5-9.7%. The company anticipates its overall finance cost for FY26 to be around ₹90 crores, with depreciation at approximately ₹60 crores, including all expansion. A term loan repayment of ₹70 crores is planned for the year. The company aims to maintain ROCE above 22-25% and reaffirms its long-term vision of becoming a $1 billion company.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.