Goodluck India Limited — Q1 FY26 earnings call

Call held 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

  • 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

  • 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

  1. Income from Operations ₹983.29 Cr +7.7%YoY
  2. EBITDA ₹95.78 Cr +23.4%YoY
  3. EBITDA Margin 9.7%
  4. PAT ₹40.14 Cr +16.5%YoY
  5. EPS ₹12.6 +16.7%YoY
  6. Overall Volume 1,12,000 tonnes +9.8%YoY

What they filed

Q1 FY27: revenue up 22.7%, net profit up 25.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue976 942 1,105 983 991 +2%1,032 +10%1,061 −4%1,206 +23%
EBITDA71 80 85 92 92 +30%98 +23%91 +7%101 +10%
Net profit45 40 42 40 41 −9%43 +8%49 +17%50 +25%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Value-added sector
    24% Growth
  • Non-value-added sector
    0% Growth
  • Defence (Forging division)
    0.02 % of forging turnover Revenue Contribution₹30 Cr Revenue Amount
  • Hydraulic Tube
    50% Q1 Utilization₹1,250 Cr Potential Revenue (90% utilization)

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

medium confidence
  • Capex Capex disclosed
    • Debottlenecking and upgrading all plants to maximize production
    • Capacity expansion in infrastructure (from 1 lakh to 150,000 tonnes)
    • Adding machinery for automobile sector
    • Establishing defence production plant (M107, 155mm shells)
    Ram Agarwal: "Sir, actually, it has been a continuous process because in our kind of industry, there is debottlenecking that is a term we use because not only by installing the new machines, we can increase the capacity. We can increase the capacity by debottlenecking. And in this regular process, we are upgrading our all plants to take maximum production by debottlenecking some by adding some instruments, by adding some systems, by adding some labor. So that is a regular process we are doing."
  • Debt Debt disclosed
    • Repayment Repayment of term loan ₹70 Cr
    Sanjay Bansal: "The overall finance cost would be in the range of INR90 crores, and depreciation would be in the range of INR60 crores about, including all expansion."

Guidance & targets

Revenue

  • Top line growth Revenue · FY26 · High confidence 15-20%
    Ram Agarwal: "We stand by our guidance, what we had given last time, 15% to 20% growth. This year also, we expect."

    — Ram Agarwal

  • Defence plant revenue at full capacity Revenue · Full capacity · Medium confidence ₹270-300 crores
    Ram Agarwal: "The revenue, which we are expecting, it is just on the basis what the future will tell, but we hope it should be between -- when full capacity will be utilized, it should be almost INR270 crores to INR275 crores."

    — Ram Agarwal

  • Hydraulic tube revenue at 90% utilization Revenue · 90% utilization · Medium confidence ₹1,250-1,300 crores
    Ram Agarwal: "And when it goes to 90%, we hope a turnover we will get in this segment, it will be almost INR1,250 crores to INR1,300 crores."

    — Ram Agarwal

EBITDA Margin

  • Overall EBITDA margin EBITDA Margin · Current year (FY26) · High confidence 9.5-9.7%
    Ram Agarwal: "Sir, right now, in this quarter, we have done almost 9.74%. We hope the overall margin should be in the range of 9.5% to 9.7% in this current year."

    — Ram Agarwal

Capacity Utilization

  • Defence plant utilization Capacity Utilization · FY26 · Medium confidence 40-50%
    Ram Agarwal: "So basically, in this financial year, we expect a 40% to 50% capacity utilization in FY '26."

    — Ram Agarwal

  • Defence plant utilization Capacity Utilization · FY27 · Medium confidence 90%
    Pradeep: "And in FY '27, it will go to about 90%."

    — Pradeep

  • Hydraulic tube utilization Capacity Utilization · This financial year (FY26) · Medium confidence 70%
    Ram Agarwal: "And in the coming quarters, we hope as this tariff war stabilizes, then it can go up to what we expect. In this year, we will achieve a capacity utilization of almost 70% in this financial year."

    — Ram Agarwal

Sales Volume Growth

  • Infrastructure sector sales volume growth Sales Volume Growth · This financial year (FY26) · High confidence 20%
    Mahesh Chandra Garg: "This financial year, we are targeting a 20% increase in sales volume in this infra sector."

    — Mahesh Chandra Garg

Sales Growth

  • Solar structure segment sales growth Sales Growth · This year (FY26) · High confidence 100%
    Ram Agarwal: "Solar structure led by transmission tubes, we have made inroads and sector is poised to give almost 100% growth this year."

    — Ram Agarwal

Finance Cost

  • Overall finance cost Finance Cost · FY26 · High confidence ₹90 crores
    Sanjay Bansal: "The overall finance cost would be in the range of INR90 crores, and depreciation would be in the range of INR60 crores about, including all expansion."

    — Sanjay Bansal

Depreciation

  • Overall depreciation Depreciation · FY26 · High confidence ₹60 crores
    Sanjay Bansal: "The overall finance cost would be in the range of INR90 crores, and depreciation would be in the range of INR60 crores about, including all expansion."

    — Sanjay Bansal

ROCE

  • Return on Capital Employed ROCE · Future projects · Medium confidence above 22-25%
    Ram Agarwal: "We are what we are expecting and what we will do, we always want to keep our ROCE above 22% to 25%, and we are aiming for that. We are working for that."

    — Ram Agarwal

Company Size

  • Become a $1 billion company Company Size · Not specified, but reaffirmed · Low confidence $1 billion
    Mahesh Chandra Garg: "Yes sir, we still stand by it, and we'll do it."

    — Mahesh Chandra Garg

What to watch in Q2 FY26

Defence production license approval

As soon as possible, expected early
Current Pending with government
Target Approved 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

  • Global geopolitical tensions

    high

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

    Management acknowledged

  • Prevailing tariff war scenario

    high

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

    Management acknowledged

  • Muted domestic demand

    medium

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

    Management acknowledged

  • Government procedural delays for defence license

    medium

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

    Management acknowledged

  • Steel price volatility

    medium

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

    Management acknowledged

  • Slowdown in Indian market (money supply, government funds)

    medium

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

    Management acknowledged

  • Seasonal slowdown in Q1

    low

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

    Management acknowledged

Q&A highlights

6 direct
Implications of BIS certification on steel imports and domestic competition Direct
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

Update on the defence business and license approval timeline Partial
Ram Agarwal: "In our defence business, we have already told that we have established a new subsidiary, Goodluck Defence and Aerospace, where we have put up a plant for manufacturing M107, 150,000 shells per annum. 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.

Highlights the critical dependency on government license for the new defence vertical to become operational, with no clear timeline provided.

Asked by Riddhesh Gandhi

Capex plans and capacity expansion through debottlenecking Direct
Ram Agarwal: "Sir, actually, it has been a continuous process because in our kind of industry, there is debottlenecking that is a term we use because not only by installing the new machines, we can increase the capacity. ... In some other products like automobile, we have to add some machinery. So as per the market requirement, as per the sales projection, we take it continuously.

Explains the company's strategy of continuous debottlenecking and targeted machinery additions for capacity expansion across various segments, rather than large-scale capex.

Asked by Vedant Sarda

Details on defence shells (155mm) and potential tie-ups Direct
Ram Agarwal: "It is 155 mm shells and it is being used in India as well as the overseas markets. ... It is a medium caliber. It comes under the category of medium caliber, M107. ... For tie-ups, there are LOIs available. But whenever the production license comes and then the actual sale will happen, then only we can say that these kind of tie-ups are achieved...

Provides specific product details for the defence vertical and clarifies that while LOIs exist, actual partnerships are contingent on license approval.

Asked by Neel Mehta

Reason for Q1 FY26 revenue growth dip compared to previous year Direct
Mahesh Chandra Garg: "Look, I must tell you, second half of this quarter, Indian demand have gone down, which you must notice yourself. Indian domestic demand has gone down. Export, there was a problem. There has been no growth in export in this quarter. Due to a lot of problem in the export market, shipping lines far around and most importantly, the tariff war has affected the export market. I can tell you there has been no growth in export in the first quarter.

Identifies key headwinds (domestic demand slowdown, tariff war impacting exports) that affected revenue growth in the quarter.

Asked by H. C. Daga

Potential public issue for Goodluck Defence to unlock shareholder value Partial
Ram Agarwal: "Sir, right now, it cannot be said, but definitely in future, it can happen. ... Now the plant has to start, it has to perform for at least 1 year. Then after -- only after that, it can be thought over. So near the time, we will come back to you.

Suggests a potential future value unlocking event for the defence subsidiary, but with a clear prerequisite of operational performance.

Asked by Shaishav Vora

News about company filling explosives into shells Direct
Ram Agarwal: "I don't know from where it has come. Right now, we are concentrating only on making the empty shells. If any development, we'll always come back to you.

Clarifies the scope of their defence operations, denying involvement in explosive filling, which could have significant regulatory and risk implications.

Asked by Parin Gala

Impact of tariffs on export market and future outlook Direct
Mahesh Chandra Garg: "Look, as on date, there's a lot of uncertainty, not to the market in this year maybe, but there is uncertainty in the market, which our importers are dealing with. So nothing can be said clearly how the market will take shape. Very difficult to say anything. But I'm very sure that in next 3 months, market will definitely settle down. Trump cannot keep on fighting every day. Once the tariff settles, then things will settle down.

Acknowledges the current uncertainty in export markets due to tariffs but expresses optimism for stabilization within three months, indicating a potential recovery driver.

Asked by Tushar Gupta

2 min read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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