Goodluck India Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Goodluck India delivered a resilient performance in a challenging quarter marked by low steel prices and a heavy monsoon. While headline revenue growth was muted, strong volume growth and operational efficiencies led to a significant expansion in EBITDA margins. The management's commentary was overwhelmingly bullish, focusing on the transformative potential of its new high-margin Defence and high-growth Solar businesses, for which significant capacity expansions are underway. The company reaffirmed its ambitious 15-20% growth guidance, banking on a strong H2 execution ramp-up and the initial contribution from these new ventures.

Highlights

  • Q2 FY26 standalone revenue grew 2% YoY to ₹991.38 crores, while sales volume increased by 9.5%.

  • Q2 EBITDA stood at ₹96.10 crores with a margin of 9.72%, a significant improvement from the previous year.

  • Q2 PAT before exceptional items grew 19.43% YoY to ₹41.30 crores.

  • The new Defence (artillery shells) business has commenced production, with plans for a ₹500 crore capex to expand capacity to 4 lakh shells and other aerospace components.

  • Defence business is projected to achieve a peak revenue of ₹1,000 crores by FY28 with high EBITDA margins of 30-35%.

  • Solar support structure business is targeted to reach ₹500-600 crores in revenue in the next year.

  • Management confidently reiterated its long-term revenue growth guidance of 15-20% for FY26 and FY27, despite a slower H1.

Concerns

  • Dependence on timely commissioning of new projects

Key financials

2 periods

Q2

  • Revenue
    ₹991.38 Cr
    YoY +2%
  • EBITDA
    ₹96.1 Cr
    YoY +30.8%
  • EBITDA Margin
    9.7%
  • PAT (before exceptional)
    ₹41.3 Cr
    YoY +19.4%
  • EPS
    ₹11.95
    YoY -13.4%

H1

  • Revenue Growth
    5%

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.

Guidance & targets

Revenue

  • Consolidated Revenue Growth Revenue · FY26 & FY27 · High confidence 15-20%
    Okay. As we have already told that we are for a long-term growth of 15% - 20% and in long-term we are going to maintain it. So, the turnover of this year and the next financial year should be in that line only.

    — Mahesh Chandra Garg, Chairman

  • Defence Business Revenue (Shells + Aerospace) Revenue · by FY28 · High confidence ₹1,000 crores
    With the augmentation of the capacity and reaching to 4 lakh shells and the other allied products, the peak turnover will be Rs. 1,000 crores.

    — Ram Aggarwal, CEO

  • Defence Business Revenue Revenue · FY26 · High confidence ₹100 crores
    In FY '26, we are expecting only Rs. 100 crore per revenue.

    — Ram Aggarwal, CEO

  • Defence Business Revenue Revenue · FY27 · High confidence ₹300 crores
    in the next year, we are expecting the full revenue from this capacity, which should be almost Rs. 300 crores.

    — Ram Aggarwal, CEO

  • Solar Tracker Tubes Revenue Revenue · by next year (approx. FY27) · High confidence ₹500-600 crores
    And for Rs. 500 crores - Rs. 600 crores, we hope by the next year, we will achieve it.

    — Ram Aggarwal, CEO

Margin

  • EBITDA Margin Margin · Near term · Medium confidence around 9.72%
    This quarter we have cropped 9.72% and we hope margins to remain in the same space.

    — Mahesh Chandra Garg, Chairman

  • Defence Business EBITDA Margin Margin · Medium term · High confidence 30-35%

    Previously 20-25% → 30-35%

    But to the last participant, you just commented it could be 30% - 35%. Sir, what has changed? ... Yes. This market is very dynamic, because everywhere war is going on, demand and supply, it is a perfect match. So, but when we have started, then now we are hoping that the margin should be in the range of 30% - 35% EBITDA.

    — Ram Aggarwal, CEO

Capacity

  • Hydraulic Tubes Plant Utilization Capacity · by March 2026 · High confidence 70%
    Hydraulic Tubes plan we had commissioned in January and it is likely that by this year end, by this financial year end, say March 26, it should ramp up to 70%.

    — Ram Aggarwal, CEO

Debt

  • Long-term Debt Debt · Medium term · Medium confidence ₹300-350 crores
    But as Mr. Bansal has said, we are at 160 today, and we are comfortable with Rs. 300 crores to Rs. 350 crores long-term debt.

    — Ram Aggarwal, CEO

Risks & concerns

  • Dependence on timely commissioning of new projects

    high

    The entire future growth and margin expansion story hinges on the successful and on-schedule ramp-up of the Defence and Hydraulic Tubes capacities. Any delays could materially impact guidance.

    Analyst downplayed

  • Execution risk for H2 ramp-up

    medium

    Management cited a 'prolonged and heavy monsoon' disrupting Q2 execution. Achieving the full-year 15-20% growth target is now heavily dependent on a strong H2 performance.

    Management acknowledged

  • Weak steel prices and rising imports

    medium

    Domestic steel prices fell to a five-year low, and rising imports from China are pressuring the core business. The company is mitigating this through volume growth and a shift to value-added products.

    Management acknowledged

Areas of evasion (2)

  • Raw material pricing for defence shells
  • Specific domestic vs. international customer mix for defence orders

Q&A highlights

1 direct
Defence Business Economics & Profitability Direct
Yes. This market is very dynamic, because everywhere war is going on, demand and supply, it is a perfect match. So, but when we have started, then now we are hoping that the margin should be in the range of 30% - 35% EBITDA.

Management revised the EBITDA margin guidance for the key defence business upward from 20-25% to 30-35%, indicating significantly higher profitability potential than previously communicated.

Asked by Sanyam Shah

Credibility of FY26 Growth Guidance vs. H1 Performance Partial
Guidance is a matter of confidence. Okay. We are confident we are going to achieve the growth. The quarter gone by in my 40 years of industrial life, I have never seen a quarter gone by which has dampened the growth... We are not worried and we are confident. We will achieve the growth what we have aimed at.

Management strongly reaffirmed its 15-20% growth guidance despite a slow H1, staking personal credibility on a strong H2 recovery, but did not provide a quantitative bridge to the target.

Asked by Subash B.

Value Unlocking Strategy for Defence Business (IPO vs. Demerger) Partial
As per the current thinking, we want to do an IPO for this and as the business progresses, we will decide for the right time and inform you.

Clarifies that the management's current preference is an IPO for the defence subsidiary, though they remain open to considering a demerger, which has implications for how value will be distributed to existing shareholders.

Asked by Riddhesh Gandhi

2 min read 5 chapters

Detailed narrative

Q2 Performance: Margin Expansion Amidst Headwinds

Goodluck India reported a resilient Q2 FY26, navigating a challenging environment of five-year low steel prices and monsoon-led project disruptions. While standalone revenue grew a modest 2% YoY to ₹991.38 crores, sales volumes saw a robust 9.5% increase. The highlight was operational efficiency, with Q2 EBITDA margin expanding to 9.72%, driving EBITDA up 31% YoY to ₹96.10 crores. PAT before exceptional items followed suit, growing 19.43% to ₹41.30 crores.

Defence: The New High-Margin Growth Engine

The company's strategic pivot into defence manufacturing is the cornerstone of its future growth. Having commissioned its 1.5 lakh artillery shells/annum plant, it announced a ₹500 crore capex to expand capacity to 4 lakh shells and add capabilities for missile and aerospace components. Management projects this segment will generate ₹100 crores in FY26, ramping to ₹300 crores in FY27, and ultimately reaching a peak annual revenue of ₹1,000 crores by FY28. Critically, the EBITDA margin for this business is guided at an exceptionally high 30-35%, a significant upward revision from previous estimates.

Strategic Focus on Solar & Hydraulic Tubes

Complementing the defence push, Goodluck is scaling its presence in green energy and specialized engineering. The solar support structures business, currently at a ~₹250 crore run-rate, is targeted to reach ₹500-600 crores in revenue over the next year with stable 7-8% EBITDA margins. The new Hydraulic Tube plant, which commenced operations in January 2025, is on track to achieve 70% capacity utilization by March 2026, positioning it as another key contributor to value-added growth.

Full-Year Guidance Reaffirmed with Strong Conviction

Despite H1 sales growth of only 5%, management confidently reiterated its long-term guidance of 15-20% annual revenue growth for both FY26 and FY27. The Chairman expressed strong conviction in a significant H2 ramp-up as execution normalizes post-monsoon and new capacities begin contributing. This confident stance signals a strong order book and high visibility for the coming quarters.

Capital Allocation and Value Unlocking Strategy

The transformative ₹500 crore capex for the defence expansion will be funded through a mix of debt and equity. Management indicated comfort with increasing long-term debt to a level of ₹300-350 crores from the current ₹160 crores. To unlock the value of the high-growth defence subsidiary, the current plan is to pursue an IPO at an appropriate time, although management acknowledged shareholder feedback suggesting a demerger as an alternative.

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