Goodluck India Limited (530655) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the GoodLuck India Limited Q1 FY '27 Earnings Conference Call hosted by Kaptify Consulting. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vinay Pandit from Kaptify.

Thank you, and over to you, sir. Thank you. Ladies and gentlemen, on behalf of Kaptifiscal Consulting Investor Relations team. I welcome you all to the Q1 FY '27 post-earnings conference call of Goodluck India Limited. Today, from the management team, we have with us Mr. M.C. Garg, Chairman; Mr. Ram Agarwal, Chief Executive Officer; and Mr. Sanjay Bansal, Chief Financial Officer. I would now request the management to brief us about the business and performance highlights for the completed quarter, and then we'll open the floor for Q&A. Over to the management.

Hello. This is MC Garg. Good morning, everyone, and a very warm welcome to the Q1 earnings conference call of Goodluck India Limited. Thank you all for joining us and for your continued trust and support. FY '27 [indiscernible] , and I'm pleased to say that conformation Goodluck India is becoming increasingly desi in our financial performance and business profile. Over the past few years, we have been consciously moving towards becoming the diversified engineering company with a greater focus value-added technology even application increasing product. Today, our present expense defenses infrastructure, renewable energy, nonfusion, railways, automating, construction is and other industrial aggregation. The verdict is making our basis more releases while improving the quality of our mix. Q1 performance reflected the progress, revenue grew strongly, while [indiscernible] grew faster supported it better product bases, high equalization and operational efficiencies, a quite really important development in the defense band and a new look in invested in the business in the long-term we and retina and regulatory approval, demonstrate progress we are making. We also continue to see strong structural opportunities, renewal energy, parts within infrastructure and railways, both in India and in to some markets. Our export uses in other important orders. We serve customers across more than 100 [indiscernible] We continue to expand our global footprint in the series. Going forward, our priorities are clear, still the defer visits in key decision of value-adding counts, execute our domestic and Indonesian order book, improved capacity utilization and maintain [indiscernible] If we believe the investment made over the last 3 years are creating multiple growth in Goodluck India. Our objective remains to build a stronger, more diverse wide, higher quality in capably all delivering sustainable growth in period long-term value for all our stakeholders. With these remarks, I would now like to invite our CEO to take you to the operational performance in greater detail. Thank you.

Thank you, sir. This is Ram Agarwal. Good afternoon, everyone. Thanks for joining us. Q1 FY '27 was a strong quarter operationally and demonstrates the progress of our strategy with 31% revenue growth 4% EBITDA growth and 67% pad growth with EBITDA margins above 10% mark. The key takeaway is that profitability is growing significantly faster than revenue. reflecting better product mix, capacity utilization and operational efficiencies. On the volume side, stand-alone volume has increased 8.8% Y-o-Y to 2,718 metric tons, while annualized capacity utilization remains strong at 98%. The most significant operational development during the quarter was the acceleration of our defense business and has emerged as an important growth deliver. [indiscernible] Defense and Aerospace Limited to can order of INR 255 crores or INR 155 mm long way, ready to fill empty shares to be executed over 10 months. In addition, it received an order of INR 52 crores or INR 2,155 shell with execution over 3 months. The near-term focus is now on converting these orders into production and deliveries while maintaining the stringent quality requirements applicable to defense products. Goodluck Defense has also received [indiscernible] quality assurance certificate for 17 are to build at shares. This strengthens our quality qualification for future opportunities. As I have released also, despite all the headwinds, your company has been successful in waiting through the choppy waters, today, innovating, mobility and defense. Other pillars around which total global economy is moving around. Your company is well connected to these sectors, which are supporting these pillars. We talk of energy, we need infrastructure to support power generation. We are making solar support success for fixed entrants, both ties to support renewable energy. In this energy decision at [indiscernible] , Solar is supporting India to continue its strike to the future against 500 gigawatt nonfuel fuel, nonfocal energy, 300 gigawatt has already been achieved. Out of this 164 gigawatt solar we have achieved so far. 55 gigawatts added in last year only. that this data shows only that there is a great market available for our solar products. We are presently saving 30% plus market share of this sector to transmit this synergy across the states, we are making transmission line towers to the tune of 50,000 tonnes every year and to give power to the last mile, meeting submission structures, this sector likely to grow by 50% in the next 2, 3 years. [indiscernible] or network, it will have for the mobility and the railway network is required to act and resolve. We are in good business toward safety barriers and in rail routes we are making still early bites and recently completed bullet train project from Endava to Mumbai, we see 100% growth in this sector in coming 3, 4 years. To combat West Asia volatility to the gas and petroleum product, government has recently announced INR 80,000 crores in [indiscernible] scheme to drill and transport oil. It mids new refineries, new oil blocks, new transfer lines pour company posing is a major supplier to all type of planes, whether in the subsea or over the ground, whether it is asset [indiscernible] material we are there, not only domestic but globally as well, like ADNOC, Saudi Aramco or any new fall. The future is waiting for this product. We see almost 60% growth in the next 3, 4 years in this particular sector. Automobile is an area with defined fund [indiscernible] India, 2-wheelers, 4-wheelers, light water vehicles, TVs, it needs special structure which are light in weight, but having same toughness and durability as the alternate like [indiscernible] of seamless tube sector lease now introduction. July has seen the peak production of 4-wheelers [indiscernible] company is present in a very specialized sector, CDW in America is on tubes, construction tubes, hydraulic tubes, recently developed 245 MOD into 70 sites for hydrolic which is an alternate to sales being imported till today. We all will have that [indiscernible] parsing through destruction by way of different walls and every restriction future is construction. That is the reason U.S. is still procuring these special tubes even after 50% duty. We see a big opportunity in this segment. Right now, we are doing almost 1,000 plus turnover in this product, and we would like to double it in coming 4, 5 years. And now we talk of an interesting sector defense, which has originated from our forging vertical. As [indiscernible] are going on and many new ones are on the bulk of reduction[indiscernible] and expansion of territories by Workpower is leading the world in an unknown territory. Friended turning to talk of [indiscernible] or is Lamas U.S., many new fronts are likely to open. U.S. withdrawal from worse has given anxiety to 27 European countries continuing an adept on Middle East has given to new into Southeast tyPakistan, depleting U.S. stock also since shaving to is fine of its lease. What is the solution? Real is the only solution. We are now for INR 850 million in next 5 years, Rangeland our new [indiscernible] U.S. India is racing against time to acquire new technologies, filling up of marketing product -- military production. Boosting up exports to foreign exchange, we have used INR 38,000 crores defense export. Your company is available in this field. We have established a production of 150,000 shares of M17 is latest for then now technology is moving at the speed of light. So our R&D team is continuously working on future technologies of munition. We want to become a reliable and precision supplier of fully ITU shares in future. Aerospace in other part where supplier where we will be putting capacity to become the part of ecosystem. India is lacking badly apart from iNCAC95295. Now part of [indiscernible] is likely to be manufactured in India the supplier ecosystem is a need of time. In all company aims to achieve INR 34 crores to INR 350 crore target this year within March EBITDA of 30%, 35% future plans are ready and soon, we will embark on execution of SIM. Looking ahead, our focus for FY '27 will be on 4 key areas: ramp-up of defense production execution of defense order book, increasing contribution of value-added products, including ramp-up of deletes division and continued growth in domestic and international infrastructure and transmission business, remain confident of delivering healthy growth in revenue and profitability during FY '27 supported by our strong quarter optimum capacity utilization and increasing contributions from the defense and the specialized engineering business. At the same time, we will remain focused on cost discipline, operational efficiency and prudent capital allocation. We believe [indiscernible] India is well positioned to build on this moment to FY '27 and beyond. With this, I would like to conclude my opening remarks and request Mr. Bansal to give the details of the financials.

Good morning. I am Sanjay Bansal, CFO. On behalf of Goodluck India, I welcome you all for joining us for the conference on the performance of the company in Q1 of financial year regarding Q1 performance, we stand alone, the income from operations was at INR 1,25.94 crores as against INR 83.9 crores during Q1 of previous year. However, EBITDA for the quarter increased by 15% stood at INR 110.5 crore against INR 95.78 crores Profit after tax, including other comprehensive income of INR 49.66 crores in Q1 of FY '27 as compared to INR 4.14 crores in Q1 of 2026. The earnings per share has been at INR 4.94 per share in Q1 27 as against INR 126 during Q1 of previous year. Performance consolidated during Q1 of FY '27 was, again, very good. Total income increased by 3% at INR 1,247.4 crores as compared to INR 98.29 crores during Q1 of previous year. EBITDA was INR 13.66 crores as a INR 95 crores, registered an increase of 46%. PAT during Q1 of current year was or registering a growth of 67% on a year-over-year basis. Earnings per share stood at ILS 1913 per share during Q1 of current year as a [indiscernible] share during FY '26 registering a growth of 52% over previous year. On financial front, our interest cost and other expenses have marginally gone up due to increase in level of activity during Q1 of '27 as compared to previous [indiscernible] thank you very much. Now we are open for a Q&A session.

[Operator Instructions] The first question comes from the line of Nishita with Safia Capital.

Am I audible?

Yes, Nishita.

Yes. So I had a question on the listing of our Goodluck Defense subsidiary. So I just wanted to understand why are we not demerging the entity instead of listing it separately. Because if you have a listed completely, how are we going to create value for our current shareholders. So I just wanted to understand that

Basically, what we think today, the company will be, and we will be going further listing on the basis of the future numbers. And as far as for the demerger, our consultants is a advisers, financial companies and advisers for getting it listed separately in the favor of the shareholders.

Right. But the current shareholders in the benefit of the company, how is it going to create value for the current shareholders of the company.

But current listing. Listing will also create the value of the current shareholders as well. As the company will move forward, it is for the relevant of the shareholders only. It is a subsidiary of the Goodluck India. So shareholders of all the Golar will get benefited by this.

Right understood. And my next question is that we had or of around 2% in this quarter. So do you foresee this growth continuing throughout the year what kind of go do we see from the dime?

You hope that the growth, whatever we have restored this quarter, it should sustain in the near future also.

And the margins also?

Margins, it is a man on what is the 30% to 35% range on margin should be there as we expect.

Okay. I understand. And my last question is on the defense order book. So any we have an order of around INR 200 crores, which is going to be executed in the next 10 months. So do we have an order this pipeline where we are even those -- what do you can quantify the order pipeline for the difference?

Order pipeline is quite good. we have a good visibility. But this is -- but it all depends on whatever advances we get on that basis only, we declare the orders. But we start is a good pipeline. There is no delta orders for this product right now for the company.

The next question comes from the line of Saba with Financial management.

First of all, congratulations on a great set of numbers. I just had a couple of questions regarding the order win from the [indiscernible] -- the company secured an order of INR 255 crores. However, the volume wasn't mentioned on how many sales would be supplying to kind the management, first of all, is to clarify that?

Basically, we only -- we declared this INR 255 crores. It is approximately 50,000 shells.

Okay. So define comparable realization with the order of INR 52 crores versus the order of INR 255 crores, the realization is almost level. So what's the reason that we different [indiscernible] One of the.

These are 2 different versions of Shell, first 17; and second is FR

And 17 will be 50,000 shares.

Depends on the range of the shell. The first one is 18 kilometers. Second one is 38-kilometer range.

Okay. So the 18 kilometers would it be the 20,000 shares corridor?

Yes.

Okay. And then the company recently fitting that the expected ramp-up would take place in H1 of FY '26 on September or October of FY '296 However, initially, the management has said that the expansion would be completed by end -- so what is the reason for the 6-month deal of the ramp-up?

Basically, it is a financial closure. Now the financial closure is being done and our risk. So as far as the financial closure is over, we will start ramping of the production, as we have said. So that is why there is a delay due to the financial close of the project.

Okay. But we are confident that we'll achieve the expansion by H1 FY '27?

We will definitely get it. It all depends on the approvals and regulatory systems because that is a major point in this call, whatever we plan approvals and regulations are always important. They may take time, which is beyond our control.

Okay. And one last question would be that what can be expected time line on when we can [indiscernible] different segment, if you can clarify?

Just 18 months from today, it should be the time. But however, again, it will depend on the approvals and the systems.

The next question comes from the line of Pratik Bhandari with Art Ventures.

Just a clarification, you quoted that defense revenue for FY '27 would range between INR 350 crores and INR 400 crores. Whereas when you alluded last time, you mentioned the range would be INR 250 crores to INR 300 crores because the entire additional capacity of 250,000 shares would not get too much of time because it would start in the next year. So can you just clarify on that?

So first of all, I just clarified that the new project will take new project is delayed as we had declared in the SB filing also. Number two, the turnover what we expected this year, it is INR 300 crores to INR 350 croresAnd the future turnover was expected on the basis of only plants going on the stream, but it has got delayed. So it will be delayed by the month of the expansion.

Okay. And the margin you got the range between 30%, 35%?

Yes. We hope so that [indiscernible] should sustain.

All right. And if you can clarify as to what was the quantum of defense revenue for the first quarter Revenue and EBIT level?

It was and it [indiscernible] Revenue with 38% EBITDA, right?

Okay. And just one last question. On your debt repayment schedule, you mentioned that you would be repaying around INR 50 crores, INR 55 crores of debt. Have we repaid any in the first quarter?

Yes. We have repaid INR 25 crores and the total quantum of debt repayment is INR 54 crores for FY '27, right? It could be INR 62 crores. So we would be paying a higher debt.

The next question comes from the line of Shekar Mundra, it for commercial.

So my question is for the subsidiary, Aerospace and Defense, why did we raise funds from external investors? Why not get a right issue in Goodluck India itself and so that the whole benefit would have been with the shareholders of -- Goodluck India and also when you list the subsidiary, the shareholders of Gulag, India won't be getting shares of -- good luck aerospace and defense directly in their account. So how will it be beneficial for the shareholders of Goodluck India?

Sir, Goodluck defense and aerospace -- list remains a subsidiary of Goodluck India. So anyhow, whatever Goodluck India will get India shareholders will also get so for the interest of the company, we feel that this company should be listed because this company has to far. So funds will be needed. And for that perspective only, we are taking it to the public. So wouldn't have been have not issue earlier, it proved have bought ratio Goodluck India, and that invested that money for Goodluck difference in aerospace. And now we would have listed it then the shareholders of -- Goodluck, India would also have got shares -- Goodluck defense directly. So that structure would have made more sense, right? Actually, there are 2 views. Your view is also appreciate. But our financial advisers, they have preferred this route. That is why we have taken this out.

I'm very -- I just wanted to understand, sir, because I don't want Goodluck shareholders will be at a discount because when you get a subsidiary value would look the real value of shares does not get reflected in Goodluck market capitalization. That is the problem with all these holding companies get a lot of discounts. So we should not have been lost because see, if you had a problem in raising money then for all practical purpose, you should allot shares of your defense company to the Goodluck shareholders. And so that would not the different companies benefit is also passed on to -- Goodluck shareholders. you may be holding it 80%, 70% in Goodluck, but that discounting will be huge. You say Goodluck, eventually Goodluck defense will quote as INR 4, and good luck value will get value of only INR 70 or INR 60 propose to their market bilization. And this is about appreciate you See, I understand. Now Reliance also an for a realized go, eventually reliance interest shareholders will get realized your shares. And the promoter of Reliance industries will directly hold shares in Reliance [indiscernible] So you should have that practice because your company is also professionally managed. These are all typical style of the old traditional promoters who try to control the company through the holding company.

I appreciate. So we will take it -- we will keep it in mind.

Yes. I am on the report so that you realize after 2 years, when your different company will get a huge premium and the shareholders of Goodluck will be at a discount. So I kindly consider my request. You should immediately revert this company and a lot the shares of the different company to the -- directly to the lots of Goodluck shareholders and list that company also eventually, when you go for listing [indiscernible] assess that [indiscernible] is run by to professionals.

Yes, yes.

The next question comes from the line of Ritika set with Anandia Wealth Advisors. Please go ahead.

So thank you for a good kind of number One important question which we would like to highlight is what is the overall -- where are we today in terms of overall realization, which we expected it to reach in the next 3 years at INR 9,000 per ton today. So that's the first question.

If you want to know when you will at 9,000 overall put. Correct. Correct. Overall realization in Q4, we had mentioned that we will compare around INR 7,000 per ton and our anticipation forecast was about -- in the next 3 years would be around INR 9,000 per tonne.

So what -- where are we today? There will be something today in the general concern.

In this quarter, it has not increased much, but in the coming quarter because this quarter was impacted by the West Asia crisis, -- so we hope in the coming quarters, what guidelines statements I have given, we will achieve it, not an issue because we are on the right path.

Sir, second question is in the precision pipe and [indiscernible] segment, as well as the in CRC segment. In these 2 segments, in particular, what are our respective margins because we haven't given a margin breakdown in terms of these 2 segments.

In terms of EBITDA, this pipe and C, it is normally 3% to 5% margins. And in that precision tit 12% to 13% EBITDA margins.

Okay. And what about the solar engineering success and solar?

Solar is normally 7% to 8%, and this infrastructure is normally 10% to 11%.

And what are the key risks at this point of time, if you see -- do you see any input cost risks as of now with the positive developments in the geopolitical tension?

Yes, yes. input cost risk is very high because [indiscernible] going up and down. We never know when the call will start when the go will stop. So all the petroleum products get volatile and the portion products are in every product, whether we use packing material, whether we use gas everywhere, this is a petroleum yes, definitely, it is a cause of concern. And moreover, the logistic cost, it goes up and down by this West Asia crisis. So that is a concern. And we have seized all the problem, and we are taking steps to mitigate this effect to our vote.

Okay. And lastly, what are the -- our EBITDA margins for the 4G sector?

In our case, it is normally 12% to 13%.

The next question comes from the line of Ronak Single with Nava Asset Managers. Please go ahead

So why is the defense segment not disclosed separately in the financial results, given a completing contribution to the company's overall reterms?

The question is not audible.

Hello, is it audible now?

Yes, sir.

So why is the defense segment not disclosed separately in the financial results, given it's increasing contribution to the company's overall business?

We already gave -- in consolidated, we have given. Consolidated it will come. I'm asking the segment results separately. Yes, yes. It is given stand-alone we have given -- the [indiscernible] we have given and I consolidate also given.

No, no, the result set doesn't have segment classification.

This is only 1 segment, iron and it even defense sector, it is all under ironsteel segment only.

The next question comes from the line of Amish Kanani with Nova's Investment Managers.

Sir, if you can -- there was this transaction where we have raised some INR 285 crores at a price of 375 for our defense subsidiary. So sir, given that the annual report for FY '26 is not out there is some implied valuation that we have done for the subsidiary. If you can update us on that, sir.

Come again?

Sir, we have raised INR 25 crores at the rate of INR 375 of our different subsidiary. So if you can give us some sense of how many shares or what is the valuation at which this defense aerospace subsidiaries valued because it's very clear that we have implied a valuation of our subsidiary and diluted. So if you can give us some sense of the valuation?

It is a simple math is we have given the amount which we are intent to raise it is 25%, and we have given the partial rate also INR 375. So you can easily calculate how much there is no number of shares given that's why.

Sir, is the number of outstanding shares of defense and aerospace at this point in time.

Sir, it was we don't have an annual report of latest annual report of our company as well. We will hear at this time, we are issuing almost 75 lakh shares -- you will get a 75 lakhs.

And what is the total outstanding share of visitors of [indiscernible]

Before the suits outstanding number of shares product [indiscernible] crores, INR 10.91 crores was outstanding and they've issued INR 75 crores. If we are coming out after the [indiscernible] it will be 5.66 INR 56 crores is the rupees growth or number of shares, number of shares.

I got it, sir. Yes, that helps, at least in terms of some electrification. And sir, if you can also give us some sense of the overall update on overall guidance, and you've given us some guidance on the revenue side for the defense, but defense is percentage of total, how would it be? Or maybe overall, what will be the consolidated growth rate or a stand-alone growth rate, excluding defense for the year? Because what I've seen, sir, other exports is doing well again for the first quarter. and there is seemingly you as a region probably has started to kind of give us some sense of growth. So one, where is the growth on the exports coming and second, my outlook on exports if possible, sir.

The growth for exports is coming both from the U.S. and Europe. The outlook positive at the moment. But again, depends on national geopolitical situation, which is very much evolving on a daily basis.

I appreciate, sir. And any sense of what was the first quarter growth of exports we can imply from the presentation budgets for the benefit -- quick benefit. And whether we should assume either if you can give us some sense of the order book or a pipeline from the exports, it will help us kind of understand the growth prospects for exports, sir?

It was around 53% for this quarter, the pipeline of orders is pretty healthy for this quarter also -- but again, geopolitical is a factor which should not be capesize that we have to continuously monitor.

I understand. It's very uncertain. And sir, last question before I go back in the queue, transmission lines are also there was a mention in 1 or 2 presentation before. that transmission lines, exports are also looking up. So any sense of how is that and whether EU or U.S. transmission orders are also picking up, sir?

Basically transmission, solar energy, this noncosting is getting more and more. 300 gigawatt has already been -- is already coming. But the issue is power is not getting transmitted to the states or the place where it is required. So India is lagging on that. So that is why there is a push on the more and more transmission lines. from the solar centers. It is Rajasthan and your usual. So it is looking up, and I hope in next 3, 4 years, this demand will be made up.