Goodluck India Limited — Q3 FY25 earnings call

Call held 10 Feb 2025

Management summary

Goodluck India delivered a strong quarter in terms of profitability, with PAT growing 26% YoY despite a modest 7% revenue increase, underscoring a successful shift towards higher-margin products. Management provided a bullish outlook, underpinned by two major growth drivers: the newly commissioned LDP plant and the upcoming defense vertical. These projects are expected to significantly boost revenue and margins from FY26, with the company targeting over ₹4,650 crores in revenue for that year. While operational guidance was clear and confident, management deflected specific questions on balance sheet accounting, creating a minor red flag.

Highlights

  • Q3 FY25 Standalone Sales grew 7.25% YoY to ₹941.98 crores.

  • Q3 FY25 Standalone PAT increased significantly by 26.2% YoY to ₹40.08 crores, driven by a focus on value-added products.

  • Q3 FY25 EBITDA Margin stood at 8.76%.

  • 9M FY25 Standalone Sales grew 7.97% YoY to ₹2831.27 crores.

  • Total capacity is being upgraded from 4,50,000 MTPA to 5,00,000 MTPA in Q4 FY25 following the commissioning of the new LDP plant.

  • Strong revenue guidance for FY26, targeting ₹4500 crores from the base business, plus an additional ₹150 crores from the new defense vertical.

  • The new LDP (hydraulic tube) plant is expected to generate a minimum of ₹500 crores in revenue in FY26.

  • The upcoming defense plant is projected to have a peak revenue potential of ₹250-300 crores with high EBITDA margins of over 25%.

Key financials

2 periods

Q3

  • Sales
    ₹941.98 Cr
    YoY +7.2%
  • EBITDA
    ₹82.48 Cr
    YoY +9%
  • EBITDA Margin
    8.8%
  • PAT
    ₹40.08 Cr
    YoY +26.2%
  • EPS
    ₹11.85
    YoY +4.1%

9M

  • Sales
    ₹2,831.27 Cr
    YoY +8%
  • PAT
    ₹119.61 Cr
    YoY +25.9%

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

  • LDP (Hydraulic Tube) Plant Revenue Revenue · FY26 · High confidence ₹500 crores (minimum)
    Got it and we expect 500 crore from that plant for FY26? Yes, that is a minimum you should expect.

    — Management

  • Defense Plant Revenue (Peak) Revenue · FY27 · High confidence ₹250-300 crores
    So, defense basically, when in the full capacity it will give a turnover of 250 to 300 crores.

    — Management

  • Defense Plant Revenue (FY26) Revenue · FY26 · Medium confidence ₹150 crores
    so almost 150 crores we should achieve in FY26 as we expect.

    — Management

  • Total Company Revenue Revenue · FY26 · High confidence ₹4500 crores + Defense Revenue
    It should be, it is extra then the 45 we are targeting for the coming financial year, say by FY26 and the defense revenue should be addition to it.

    — Management

Margin

  • Defense Plant EBITDA Margin Margin · Post-commissioning · High confidence >25%
    And margin we have not yet commissioned, but it seems margin should be +25. EBITDA margin will be +25.

    — Management

Capacity

  • Total Production Capacity Capacity · Q4 FY25 · High confidence 5,00,000 MTPA

    Previously 4,50,000 MTPA → 5,00,000 MTPA

    Our capacity right now is 4,50,000 MTPA, which will be upgraded to 5 lakhs in Q4.

    — Ram Agarwal

Other

  • Defense Plant Commercial Production Other · Q2 FY26 · High confidence Start
    Company hopes to go to commercial production in Q2 FY26.

    — Ram Agarwal

Risks & concerns

  • US Political Risk / Tariffs

    medium

    Management explicitly cited potential US restrictions or duties as a risk to the export-oriented LDP plant's performance.

    Management acknowledged

  • Working Capital / Accounting Transparency

    medium

    Management deflected two separate analyst questions about a large spike in 'other receivables' in the FY24 annual report, suggesting a lack of transparency on the matter.

    Analyst deflected

  • Global Economic Slowdown

    low

    While acknowledging a global slowdown, management expressed confidence that the company would not be impacted due to its focus on high-demand niche sectors.

    Management downplayed

Areas of evasion (1)

  • Accounting treatment of a large increase in 'other receivables' in the FY24 annual report.

Q&A highlights

2 direct, 1 evasive
Revenue and Margin potential of new Defense and LDP plants Direct
So, defense basically, when in the full capacity it will give a turnover of 250 to 300 crores. And margin we have not yet commissioned, but it seems margin should be +25. EBITDA margin will be +25.

This Q&A quantified the significant future revenue and high-margin contribution from the new growth verticals, which are central to the investment thesis.

Asked by Deepak Pandey

Clarification on FY26 revenue guidance of ₹4500 crores Direct
It should be, it is extra then the 45 we are targeting for the coming financial year, say by FY26 and the defense revenue should be addition to it.

This confirmed that the new defense business provides an upside to the already strong baseline revenue guidance, clarifying the total expected growth trajectory.

Asked by Pratik Bhandari

Accounting for a large increase in 'other receivables' in FY24 Evasive
Yes, you kindly do one thing. You send us your query, we will reply in detail, right now not possible to explain the same in detail, so please send your query.

Management's refusal to discuss a significant balance sheet item on the call raises a red flag about transparency and potential working capital or accounting complexities.

Asked by Mahesh Galati

2 min read 5 chapters

Detailed narrative

Q3 Financial Performance: Margin Expansion Outpaces Revenue Growth

Goodluck India reported a standalone revenue of ₹941.98 crores for Q3 FY25, a modest 7.25% YoY growth. However, profitability saw a significant uptick, with PAT growing 26.2% YoY to ₹40.08 crores. Management attributed this strong bottom-line performance to their strategic focus on value-added, high-margin products. For the nine-month period, sales grew 7.97% to ₹2831.27 crores, while PAT increased by 25.85% to ₹119.61 crores, reinforcing the trend of improving product mix.

New Growth Engine 1: LDP (Hydraulic Tube) Plant

The company's new LDP plant in Bulandshahr, which commenced operations on January 1, 2025, is a key pillar of future growth. This plant has added 50,000 MTPA of capacity, taking the company's total capacity to 5,00,000 MTPA from Q4 FY25. Management has guided for a minimum revenue of ₹500 crores from this plant in FY26, expecting to achieve 70-80% capacity utilization. The plant's unique size range is reportedly attracting strong inquiries globally, though management noted potential US tariffs as a risk.

New Growth Engine 2: High-Margin Defense Vertical

The company is making a strategic foray into the defense sector with a new plant for 155mm medium caliber shells. With a total capex of ~₹220 crores (₹150 crores already spent), the plant is expected to begin commercial production in Q2 FY26. Management projects a peak annual turnover of ₹250-300 crores at full capacity (expected in FY27) with a highly attractive EBITDA margin of over 25%. For the first year of operation, FY26, the company anticipates generating ₹150 crores in revenue, which will be incremental to its base business targets.

Bullish FY26 Outlook and Capacity Expansion

Management has set a strong revenue target of ₹4,500 crores for FY26 from its existing operations. Crucially, they clarified during the Q&A that the anticipated ₹150 crores from the new defense business will be in addition to this, pointing to a total revenue target exceeding ₹4,650 crores. This growth is supported by a 13% YoY volume increase in 9M FY25 and a continued focus on high-growth sectors like auto, infrastructure, and renewable energy.

Balance Sheet Transparency Concerns

While the operational outlook was clear, a notable concern arose during the Q&A. Management twice deflected direct questions from analysts regarding a significant ₹200 crore increase in 'other receivables' in the FY24 annual report, which was linked to a QIP monitoring account. By asking analysts to send an email for a detailed reply instead of addressing the query on the call, management created a red flag around accounting transparency and working capital management.

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