Getting on to the Railway growth potential

GOODLUCK INDIA LIMITED

Core Competency

Manufacturer of engineered Steel products. Manufacturing capacity of 3,64,000 MT p.a. at facilities spread across Sikandrabad, Dadri in Uttar Pradesh and Kutchch – Gujarat, India. Among the leading manufacturer of wide range of Engineering Structure, Precision/ Auto Tubes, Forging for Defence & Aerospace, CR Products and GI Pipes.

Work in Progress

Engineering Structures Segment
Transmission & Telecom towers, Fabricated steel structures, Railway & road Bridges & Girders.
Structures for Roads & Highways.
Primary & Secondary Structures for Boilers & Turbine Generators.
Launching Girders for Steel & Concrete Girders
Building Structures.
Technology Structures.

Recent development in this Segment

• Commenced supplies to Bullet Train Project (order Rs. 198 cr) from Kutch plant.
• Process of installation of imported Press is completed – which enable Company to increase capacity of forging single piece to 14,000 Kgs.
• Gatishakti National Master Plan approved by cabinet giving huge boost to infra sector – expansion of Road Network, Rail network gives huge opportunity.
• initiative of 100 GW solar energy is likely to boost up Company’s solar support structure capacity. Company is provider of structural solutions to Solar Power Sector. Company has supplied products to major solar projects like NTPC and Tata. Targeting to increase this vertical up to 25-30%.

Marquee Clients

Indian Railways, ABB, L&T, Reliance Industries, GMR, ISGEC, Sterling & Wilson, Alstom, PowerGrid, NTPC, Toshiba, TRF, EIL, NPCIL, MHSR

Forging Segment 

Forged flanges, gear rings, gear shanks, forged shafts, railway products, Defence, Aerospace.

The Industries that are catered to in the forging segment include Aerospace, Automobile, Construction Equipment, Defence, Earth Moving Equipment, Nuclear Power, Oil & Gas, Petrochemical, Fertilizers, General Engineering, Wind Energy.

Goodluck Specializes in Stainless Steel, Duplex, Carbon, & Alloy Steel Forgings & Flanges which is supplied in more than 100 grade products. The Industries catered are from automotive & truck (HCV), agricultural machinery & equipment, valves, fittings & petrochemical applications; hand tools & hardware; off highway & railroad equipment; general industrial equipment, marine, Aerospace and Defence. Open and Close Die machines – forgings ranging from 300 kgs to 7000 kgs.

Current Capacity of forging one single piece – 14,000 Kgs with total capacity of 30,000 MT per annum.

Marquee Clients

GE Oil & Gas, Allied Group, Saint-Gobain, Midsteel, Flaboform, Edelstahlservice, BPCL, Indian Oil, BHEL, RIL, L&T, Alstom, Mitsubishi, Brahmos, HAL.

Forging – Aerospace & Defence Segment

Presently defense contributes to around 2% of the total revenue. The company has contributed to prestigious Defence programs like Pralay Missiles, HAL – HTFE Program, Brahmos Missiles, Pinaka Rockets & Indigenous Rocket Launcher, K9 Vajra – Tracked Howitzer, Talwar Class Frigates.

The company is supplier to some of the biggest names across Indian Aerospace and Defence value chain like Hindustan Aeronautics Limited, Defence Research and Development Organization, Indian Space Research Organization, OFB – Heavy Vehicles Factor Avadi, OFB – Ordnance Factory Medak, Bharat Earth Movers Limited, Mazagon Dock Shipbuilders Ltd, Walchandnagar Industries Limited, SriVenkateswara Aerospace Pvt. Ltd, SMRJ Eng. Pvt. Ltd, Brahmos Aerospace, L&T Defence, Godrej Aerospace.

Latest Development in the Defence segment

The company recently released a Business Update wherein they stated that Goodluck India is set to expand its Defence and Aerospace play through a wholly-owned subsidiary named Goodluck Defence and Aerospace Private Limited. This subsidiary would offer forged, machined products manufactured for use in Defence & Aerospace Industry.

To meet the financial requirements of this subsidiary, the Board approved a preferential issue of Rs. 96 crore comprising sale of 500,000 convertible warrants to Promotor Group (FV. Rs. 2, with an exercise price of Rs. 600 each) and 11,00,000 equity shares to key investors (FV. Rs. 2, with an exercise price of Rs. 600 each).

Precision Pipes and Auto Tubes Segment

Products offered are Auto Tubes, CDW/ERW Tubes, Boiler Tubes, Transformer Tubes, Air Heater Tubes.

The Industries that is catered to include Aerospace, Automobile, Construction Equipment, Defence, Earth Moving Equipment, Nuclear Power, Oil & Gas, Petrochemical, Fertilizers, General Engineering, Wind Energy. With its innovative and progressive approach, Company’s product is one of classical product in terms of Quality and Consistency in domestic as well as overseas markets. The Customer satisfaction remains very high resulting in consistent and incremental repeat order. This segment is a significant contributor to the Export Revenue of the Company.

Precision Tubes has applications in Four wheeler & Two wheeler industry. Hydraulic Cylinder Tubes is used for JCB type machines for Skiving, Roller Burnishing & Honing. It has application in Industries for Propeller Shafts, Transformers, Boilers & Heat Exchangers, Furniture, Structural Tubes, Textile Machine Bobbins.

Marquee Clients

Volkswagen, Audi, BMW, Mercedes, Skoda, Renault, GM, Ashok Leyland, TVS, Bajaj, Gabriel, ISGEC, Talbros, Mahindra, Tata Motors.

CR Sheets, Pipes & Tubes Segment

The Products Manufactured are Cold Rolled Coils and Sheets – thickness 0.10 mm to 0.70 mm, Corrugated Sheets, Hollow Sections – [ Square Sections, Rectangular Sections, Round Hollow Sections ], GI Pipes.

This segment caters to Railway/Road Bridges, Support Structure, Engaged in manufacturing and exporting of wide range of Cold Rolled Coils and Sheets, and pipes, Acclaimed for high tensile strength, long service life and higher efficiency. Supplying to OEMs and Govt. projects only.

Fundamental Data

Annual Consolidated Financial Highlights
FY: 2023
Total Revenue: ₹ 3072 Cr
EBITDA: ₹ 204 Cr
PAT: ₹ 88 Cr
Quarterly Consolidated Financial Highlights
FY: 2024 Q1
Total Revenue: ₹ 859.05 Cr
EBITDA: ₹ 70.86 Cr
PAT: ₹ 28.59 Cr

Future Outlook

Railways – Government intends to spend about $137.00 billion over the next five years to augment railway infrastructure & improve safety standards Company entered large scale fabrication of over bridges and cross over bridges. Company has completed Railway over bridges/Road Bridges of 30,000 mt in last 3 years.

Solar Power – Ministry of New and Renewable Energy revised target of 100 GW from Solar; US new Policy of increasing investment in renewable energy likely to boost demand for tube vertical Company targeting to increase this vertical up to 25-30%. Same will improve Company’s margin profile.

Infrastructure – Company sees strong demand for their products from established industrial houses & government companies like BHEL and NTPC.

301 MoU’s have been signed with various states for planned capacity of about 488.6 MT and investment in metal sector is on increase.

Manned railway signals are to be converted to Railway over bridges. Cross over/Foot over bridges to be built on all railway platforms to avoid any crossing across naked railway tracks.

Government intends to spend a large amount to augment railway infrastructure & improve safety standards for passengers. Vision includes setting up of High-Speed Corridors, Expansion of Optical Fibre Cable Network, New lines & dedicated Freight Corridors.

Company entered large scale fabrication of over bridges and cross over bridges. Goodluck has been approved by RDSO to supply for Railway’s project including bridges and girders. Company has completed Railway over bridges/Road Bridges to tune of 30,000 mt in last 3 years.

Major Risk Factors

The working capital requirement is large. Working capital management and bank limit utilization will remain key sensitive factors.

Exposure to volatility in raw material prices and intense competition: GIL is susceptible to volatility in the price of key raw material, hot-rolled coils, which accounts for 70% of the total raw material cost, as the company is unable to pass on the impact of increase in raw material prices to customers in short-term contacts. In the long-term contracts, change in price is passed on only after 1-2 months.

Sector: Industrials

Market Price: Rs. 899.45 as on today

FV: Rs 2/-

Stock Name: Goodluck India LTD

BSE Code: 530655, NSE Code: GOODLUCK

Market Cap.: Rs 2100 Cr

Book Value: ₹ 220

Segment: Iron & Steel Products

Incorporation: 1986

Headquarters: Ghaziabad

Employee Strength: 3000 Plus