Goodluck India Ltd. during 4QFY25 reported a 22.4%/27.8%/12.6% YoY increase in Revenue/EBITDA/PAT at Rs 1,105 cr/85 cr/Rs 42 cr respectively. For FY25, the company registered sales volume of 4,42,619 MT (89% utilization), up 15.3% YoY led by strong demand across verticals and expanded international market reach.
Aerospace & Defence vertical gearing up trial production: The company is set to commence trail production at the new manufacturing facility of its subsidiary, Goodluck Defence and Aerospace Ltd. With an annual production capacity of ~1,50,000 units of precision components, the facility is slated to enter commercial production by 2HFY26. For FY26, we expect the plant to operate at a capacity utilization of 40%, which shall increase to ~70%-80% in FY27. We anticipate the vertical to start contributing with full year revenue of ~Rs 70 cr/270 cr for FY26E/FY27E respectively.
Expanded capacity to drive growth from 1QFY26 onwards: Currently, the company has reached the end of its major capex cycle which resulted in incremental capacities of ~88,000 MTPA across segments during FY25; taking the total capacity to 5,00,000 MTPA. This includes additional capacities of ~54,000 MTPA for CDW pipes and Hydraulic tubes which are expected to yield into a 400- bps margin expansion for the Precision pipes & Auto tubes segment, once fully stabilized (current margins: 12%-13%).
Guidance: The company has guided for FY26 revenue growth of 15%-20% YoY (excluding the defence vertical), and continues to target the goal to become a billion-dollar company in the coming 3-4 years. However, we expect Revenue/EBITDA/PAT CAGR of 15.2%/23.6%/25.7% for FY25-FY27E to Rs 5,220.1 cr/475.1cr/261.7 cr respectively.
Note: We have included our estimates of defence vertical for FY26E/FY27E.
Maintain BUY- Target Rs 1,199/-
We believe the valuation still looks attractive for long-term investors on back of (a) Expected expansion in EBITDA/t, post stabilization of Hydraulic tubes and CDW pipes capacity, (b) Commencement of commercial production at the new Defence & Aerospace facility by 2HFY26, (c) Healthy business relations with marquee clients across the public and private domain and (d) Positive demand outlook for solar torque tubes in the long run. At the CMP of Rs 900, the stock is trading at a P/E of 14.8x/11.3x of its FY26E/FY27E EPS of Rs 60.9/Rs 79.9 respectively. We assign the stock a P/E multiple of 15x on FY27E period EPS of Rs 79.9 to arrive at our TP of Rs 1,199, thus providing an upside potential of 33.2%.
