Goodluck India Ltd Q3 FY26 Earnings Analysis

- Goodluck India Limited targets a long-term revenue growth of 15% - 20% year-on-year. - For FY ‘26 and FY ‘27, the company expects to maintain this 15% to 20% growth trajectory. - Sales volume increased by 9.5% in Q2 FY2026 compared to the previous year. - The artillery shell business aims to ramp up capacity from 1.5 lakh to 4 lakh shells by FY ‘28. - At peak capacity, the shell business is expected to generate Rs. 800 crores revenue by FY ‘28. - Missile and aerospace business anticipates peak revenues of Rs. 200 crores. - The green energy segment (solar support structures) is projected to contribute Rs. 500-600 crores revenue by FY ‘27. - Defence business revenue will increase significantly and is expected to boost overall EBITDA margins. - Current capacity expansions and new product lines contribute to optimistic future volume and revenue growth.

- The company targets a long-term revenue growth of 15% to 20% annually, inclusive of defence revenue (Pages 14-15, 20). - Defence business EBITDA margin expected to be in the range of 30%-35%, potentially leading to a significant bump in overall EBITDA margin by 300-400 bps over three years (Pages 16-17). - Defence business ROCE expected around 20%-25% plus (Page 17). - Earnings per share (EPS) for Q2 FY 2026 stood at Rs. 11.95; H1 FY 2026 EPS was Rs. 24.57 per share (Page 7). - Management confident about achieving 15% growth for FY 2026 despite short-term volatility (Pages 14-15). - Increase in defence revenue contribution expected to drive higher margins and profit growth moving forward (Pages 14-17). - Capacity expansions in artillery shells and aerospace/missile parts to ramp up revenue significantly by FY 2028 (Pages 14-15, 19-21).

- Goodluck India is undertaking a significant CAPEX of Rs. 400-500 crores to expand defence shell production capacity from 1.5 lakh to 4 lakh shells per annum within the next year. - This investment also includes setting up ring rolling and press facilities for manufacturing missile outer parts and aerospace components. - The CAPEX will be funded through a mix of debt and equity, with peak long-term debt comfortable at Rs. 300-350 crores, including an additional borrowing of Rs. 50-100 crores for expansion. - The Hydraulic Tube segment, commissioned in January 2025, plans capacity augmentation by adding 50,000 MT per annum once it reaches ~80% utilization. - Strategic partnership in the Advanced Medium Combat Aircraft (AMCA) program via Goodluck Defence and Aerospace subsidiary, with an Expression of Interest filed. - Overall, the company is focused on building capability in defence, aerospace, and green energy sectors to capitalize on growing demand.

- Goodluck India Limited currently has around Rs. 160 crores of debt. - The company plans to raise an additional Rs. 50 crores to Rs. 100 crores of debt for expansion purposes. - The total comfortable long-term debt level is expected to be between Rs. 300 crores to Rs. 350 crores. - The Rs. 500 crore expansion plan will be funded through a mix of equity and debt. - The exact proportion of loan and equity for this expansion will be communicated in upcoming quarters. - There is no specific mention of immediate equity fundraising, but an IPO is planned for the defence and aerospace subsidiary at an appropriate future time.

- The artillery shell division started commercial production in October 2025. - There is no traditional order book for the defence shell product because demand outstrips supply. - The company has visibility of demand and supply for the next 2-3 years. - Existing orders, both domestic and international, are sufficient to support current and planned capacity expansions. - The artillery shells capacity is planned to increase from 1.5 lakh to 4 lakh shells per annum. - No specific value of pending orders or order backlog was disclosed due to strategic reasons. - International customers have audited facilities and have received supplied samples. - Demand is strong globally as artillery shells remain a scarce product.