Operator: Ladies and gentlemen, good day and welcome to the Goodluck India Limited Q1 and H1 FY27 post-earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I would now like to invite the management team to give their opening remarks, post which we will open the floor for question and answer session. Thank you, and over to you, sir.
[Company Representative] (Goodluck India Limited): Good morning, ladies and gentlemen. It gives me great pleasure to welcome you all to the Goodluck India Limited Q2 and H1 FY27 earnings conference call. I would like to begin by thanking our shareholders, investors, customers, business partners, and employees for their continued trust and confidence in the company. I take this opportunity to wish all of them a happy Diwali a week from now. We are pleased to report a healthy performance during the second quarter and first half of FY27. Our performance reflects the resilience of our core engineering businesses, our ability to capitalize on emerging opportunities, and our continued focus on building a stronger, more diversified, and future-ready organization. During Q2 FY27, our consolidated total income grew by approximately 38% year on year, while EBITDA increased by 31%.
[Company Representative] (Goodluck India Limited): For the first half of FY27, total income grew by 34%, EBITDA by 38%, and net profit by 42% year on year. These numbers demonstrate underlying strength of our business and progress we are making towards our long-term growth objective. In export, we grew by 38% in Q2 FY27. India is witnessing significant investment in infrastructure, power transmission, railway, renewable energy, automotive, manufacturing, defense. These sectors require high-quality precision engineered, technically advanced products, which align closely with our manufacturing capabilities and strategic priorities. We are also taking steps toward creating a more integrated corporate structure by proposing the amalgamation of Goodluck Defence and Aerospace Limited and Goodluck Green Energy with Goodluck India Limited. This initiative is intended to bring our Goodluck Engineering, Defence, and Green Energy business under a common corporate umbrella, improve strategic alignment, and create a more efficient organizational structure.
[Company Representative] (Goodluck India Limited): The detailed terms and financial implications of the proposed scheme are currently under evaluation. Our philosophy remains clear. We want to grow responsibly, strengthen our technological and manufacturing capability, maintain financial discipline, and create sustainable value for our stakeholders. As we move into second half of FY27, we remain confident about our opportunities and our established engineering businesses, expanding export presence, and investment in defense and other emerging areas, providing us with multiple avenues for long-term growth. I would like to once again thank our employees for their dedication and our investors for their continued support. With that, I would now request our CEO to take you through the operational performance and business development in the greater detail. Thank you.
Ram Agarwal: Thank you, sir, and a very good morning to all participants. I am happy to share the operational performance and business developments of Goodluck India Limited for Q2 and H1 FY27. We have delivered a strong performance in the period, driven by healthy demand across our core engineering businesses, higher volumes, and an improved contribution from value-added products. Our consolidated sales volume during Q2 FY27 stood at 133,374 tons, registering a YOY growth of 18.1%. For H1 FY27, sales volume reached 256,093 tons, representing a growth of 13.5%. This growth reflects our continued focus on customer relationship, timely execution, product quality, and expanding our business across domestic and international markets. Our product portfolio includes precision-engineered auto steel tubes and pipes, structural products, RTF shells, and other specialized engineering products.
Ram Agarwal: We continue to focus on developing products that offer great value to the customer through superior quality, precision, consistency, and application-specific engineering capability. During the quarter, growth was supported by higher sales of value-added products. Our strategy is to continuously improve the quality of our product mix, increase the share of specialized products, and strengthen our position in segments where technical capabilities and manufacturing reliabilities provide a competitive advantage. We believe this approach will help us achieve sustainable growth. If we talk of infrastructure and power transmission, the increasing requirement for transmission infrastructure, including high voltage and extra high voltage application, provides opportunity for our specialized structure and engineering product portfolio. Similarly, the railway sector remains an important market for us, with opportunities arising from ongoing railway modernization, infrastructure development, and increased demand for quality engineered components and products like for bullet train.
Ram Agarwal: We remain focused on strengthening our presence in these sectors through product development, manufacturing excellence, and efficient execution. Our automotive engineering business continues to benefit from the demand for precision engineered and quality certified products. As you know, we are focused on maintaining our manufacturing standards, improving productivity, and developing products in line with evolving customer requirements. Our diversified customer base across industries provide resilience to our business and reduce our dependence on any single end-user sector. Export remains an important growth sector driver for Goodluck India. During H1 FY27, as Garg has told, our export revenue grew by approximately 38% year-on-year and contributed around 28% of our total volumes. We continue to see opportunities in international markets, particularly for specialized engineering and value-added products. Our focus remains on expanding customer relationship, improving our geographical reach, and strengthening our position in existing as well as the new markets.
Ram Agarwal: We will continue to pursue export growth while remaining mindful of global trade conditions, logistic costs, and geopolitical developments. Defense and aerospace business, one of the most important areas of our strategic expansion through our subsidiary, Goodluck Defence and Aerospace Limited. We have been making focused investments in developing specialized manufacturing capabilities, technical infrastructures, and quality system to serve the requirement of India's defense sector. A significant development during the period was GDAL emerging as a sole technically qualified bidder for specialized 155 mm HE M1A4 ready-to-fire artillery shells for Munitions India Limited. The achievement is an important validation of our technical and manufacturing capabilities. As regards our ongoing defense orders, production is currently ongoing, involving validation activities in accordance with the government requirements. Accordingly, we expect revenue contribution from this order in the later part of the current financial year.
Ram Agarwal: We are also expanding the scope of our defense and aerospace subsidiary to include aerospace components as a new line of business within the overall capital outlay previously approved. The proposed aerospace component initiative has an estimated investment of INR 80 crore and an expected business benefit of almost INR 180 crore, as disclosed in our regulatory filing. We believe the defense and aerospace vertical has a potential to become an important contributor to the company's long-term growth and diversification. Green energy, another important area where we see meaningful long-term opportunities. Our proposed corporate restructuring involving the amalgamation of Goodluck Defence and Aerospace Limited and Goodluck Green Energy Limited with Goodluck India Limited is intended to provide a more integrated structure for managing our diversified business. It will enable greater alignment, greater strategic alignment, coordinated capital allocation, and more effective oversight as we expand into these emerging sectors.
Ram Agarwal: Going forward, our operational priorities will remain focused in key areas of sustaining healthy volume growth across our established engineering business, increasing contribution of value-added and specialized products, improving capacity utilization, productivity, and manufacturing efficiencies, executing our domestic export and defense orders efficiently, building our defense and aerospace capability while maintaining disciplined capital allocation. Building strong synergies between the entities is our main focus. We are conscious of the challenges arising from higher fuel and freight costs and the uncertain global environment. Our teams remain focused on managing these challenges through operational improvement and better cost efficiencies. Overall, we believe Goodluck India is well-positioned to benefit from the growth opportunities across its core engineering markets while progressively building new business in defense, aerospace, and green energy.
Ram Agarwal: With this, I would now request our Group CFO, Mr. Ashok Vashisht, to take you through the detailed financial performance for Q2 and H1 FY27. Thank you. Over to Mr. Vashisht.
Ashok Vashisht: Thank you, Ram Sir, and good morning and welcome everyone. I will now take you through the financial performance of Goodluck India for second quarter as well as half year FY27. I am sure by now you might have gone through our deck. The company has delivered strong operational growth during this period, supported by higher sales volume, improved product mix, and sustained operational performance. I will primarily discuss the consolidated financial performance with the relevant comments on operating cost environment. Let me now speak on second quarter first, Q2 FY27. On consolidated basis, our total income in Q2 FY27 stood at INR 13.7 billion compared to INR 9.9 billion in last year's same quarter, registering a healthy growth of nearly 38%. In terms of sales volume, tonnage grew by nearly 18.1% in this quarter.
Ashok Vashisht: Consolidated EBITDA for Q2 stood at INR 1.27 billion in comparison to INR 980 million in Q2 FY27. EBITDA margin stood at 9.3% compared with 9.8% same quarter last year. In terms of PAT, on consolidated basis, we delivered healthy profits at INR 506 million, showing growth of nearly 19% in comparison to INR 426 million in Q2 last year. While the quarter witnessed strong growth in absolute revenue terms, EBITDA and profitability, the slight moderation in margin was mainly influenced by cost environment, more particularly, higher international freight costs as well as higher fuel costs, basically gas prices, which impacted our margins to the tune of nearly 150 bps. Coming to H1 FY27, we recorded revenue of INR 26.6 billion in comparison to INR 19.8 billion in H1 FY26, and again registering a strong growth of 34% for H1.
Ashok Vashisht: In terms of sales volume, in H1 of the year, we grew by 30.5% in comparison to H1 of last year. Consolidated EBITDA increased by 38% to INR 2.67 billion in comparison to INR 1.93 billion in H1 FY26. Our EBITDA margin on consolidated basis grew to 10% in comparison to 9.8% during H1 of the last year. In terms of consolidated PAT, we grew by 42.4% to INR 1.2 billion in comparison to INR 828 million last year. The improvement in both EBITDA and PAT on half-yearly basis reflects the benefits of our operating performance, higher volume, and focus on value-added products in spite of challenging environment around us.
Ashok Vashisht: In terms of working capital, we are maintaining working capital cycle discipline, and in fact, for Q2 of the year, the working capital cycle in terms of number of days are slightly lower than previous quarter as well as Q4 last year. We will continue to focus on efficient working capital management as we grow, as well as prudent capital allocation while we pursue our growth opportunities. With this, I conclude my opening comments. Thank you for your confidence in Goodluck India. I would now hand over to the moderator to commence the question and answer session. Thank you very much.
Operator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. A request to all participants, please restrict your questions to two per participant to allow everyone to ask a question. The first question is from the line of Tanay Desai from 11H Advisors Family Office. Please proceed.
Tanay Desai: Thank you for giving the opportunity. Firstly, before asking the questions, I would like to convey my sincere gratitude to the management for taking a wonderful step in the amalgamation process. We recently participated in the preferential issue of Goodluck Defence, and rarely have we seen management take the feedback of investors so positively and take a long-term step for stakeholder value creation. We are very delighted to be part of the larger vision of Goodluck India, where all the companies will be amalgamated. Thank you for that. As a result of that, we would like to ask a couple of questions. Firstly, with regard to the vision of Goodluck Green and Goodluck Astra, especially beyond the defence products of 155 mm shells, what are the plans for products such as explosives? What are the plans for radar sector contribution, transmitter section, transmission contribution?
Tanay Desai: That would be question number one. If the management can give some light on the product line as well as the scale anticipated over the next few years. Secondly, what is the defence order book execution expectation in the rest of this fiscal year and FY28? Last question would be a bookkeeping question with regard to the working capital reduction and the path to debt reduction as the current debt exceeds INR 1,000 crore on the balance sheet on a consolidated level. Once again, thank you for the opportunity, and we truly believe that we can become a large player in the defence as well as the green space over the next five years. We remain fully invested for the long term. Thank you.
Ram Agarwal: As far as your first part of the question is concerned, that was regarding this transmission and power line system. There you know, because India is going day by day in solar, fossil fuel is reducing, but the problem is we have done almost 265 gigawatt in green, but power evacuation is becoming a very big problem. Transmission lines are not there. India could not think before. Transmission line business is on the boil today. Everywhere there is demand, and it seems for next four, five years, whatever capacity is available in India, it will be insufficient to augment the capacity of power evacuation through these transmission lines and substation. Your company is there in this field, and we are trying to increase our capacity in next six months to augment this, to take care of this capacity.
Ram Agarwal: As far as you ask for the railways, as the Government of India has done in this cabinet clearance meeting also, Government of India is improving the railway infrastructure day by day. If I talk especially of the bullet train, so Government of India has given an idea of seven bullet trains. However, it is a big guess which route will come first, whether it will be Delhi-Varanasi, whether it will be Delhi-Howrah, that cannot be said. But railway infrastructure is on boom, and your company in its infrastructure division is capable to feed this. The first order of 22,000 tons company has recently completed, and a new design of bullet train in some part company is already doing in its Gujarat facility. Can you repeat your question number, part of the two of your question? Defence order book. Regarding your defence order book, we are full of orders.
Ram Agarwal: Already we have given the stock exchange filing for 354 orders, but more orders are also there, but we normally only announce when the advance is received. So, order book is not an issue. The only issue is the execution because you know this particular industry, it is connected with validation, continuous inspections, and Government of India clearances. So, we have the capability, we have the capacity, but the issue is Government of India clearances or the geopolitical conditions where it is decided by the pillars, and if the pillars are full, so material will not go. So, that is the inbuilt problem in this kind of business, but we are fully equipped to take over, and we feel assured that the yearly targets, whatever we have given, that will be achieved. What do you have to do? What?
Ashok Vashisht: Yeah. Let me speak on the working capital. As I said in my opening remarks, so there is a huge focus on working capital because when we grow, so it is very important to focus on that area, on net working capital. So from March exit level, so we have already improved by a week, 7 days. So the focus will continue, and we have plans to put huge focus in this area. Your another question was on the debt level. Yes, it is on a little high side, but we plan to be within 2.5x for EBITDA in terms of debt. As of now, we are close to that, and we have again planned how to optimize, how to be right within our set objective for that.
Tanay Desai: Thank you so much. With regard to the debt reduction, if you can give some highlight on when we can become a net debt-free and overall debt-free company in the long term. Lastly, we continue to maintain confidence in the company and hope that the promoters take also sort of resembles that confidence and stays at the current level. That would be the last question. Thank you so much.
Ashok Vashisht: Yeah, sure. As I said, we are into the growth trajectory, so it is important to support the growth. So, we intend to be close to 2.5x for EBITDA, and eventually in the long term, we will plan how to make it lower than that. But as of now, we maintain this around 2.5x of EBITDA, close to that. We are within that.
Tanay Desai: Thank you so much, and all the best for the next few quarters ahead.
Ashok Vashisht: Thank you.
Operator: Thank you. The next question is from the line of Jatin from RTL Investments. Please proceed.
Jatin Chawla: Yeah, thank you for taking my question. The first question was basically on the defence business. I heard you say that you are confident of meeting the guidance you had given. Just double-checking, you still think we can do INR 300 crore for FY27?
Ram Agarwal: Yes. You are correct.
Jatin Chawla: Okay.
Ram Agarwal: We are still hopeful that we will maintain this. We are assured that we will maintain this.
Jatin Chawla: Understood. Thank you. Also, sir, just given what is happening on shells, we get to understand that there is now higher and higher capability shells that are being asked to be made. If I am not mistaken, your latest order is also of a higher capability shell. How is our capability moving along as the shell capabilities that are being demanded by customers are getting better and better? Just in regard to that, do you still think that we will be able to fill the 4 lakh capacity once it comes up next year at around that 30% margin?
Ram Agarwal: Sir, basically, this defence industry, it is a newborn baby, you can say. In 2014, you were exporting how much? It was in 100, of course. But now in 2025, India is exporting INR 24,000 crore. So now the defence industry has matured. Regarding the shells capability, the day when we established this capacity for 155 mm, and it was M107 grade, on the same very day, we had started research and development of the next stage. This was ERFB, BB and BT. Till today, nobody has been able to make that, but we have developed and we have got orders for the same. Our product has been validated by the international purchasers. So research and development is the basic part, and it is our basic nature of Goodluck.
Ram Agarwal: It is not that we are still stopped on this ERFB 38 kilometers, because you know what the shells are designed by. These are designed by the range. The first shell was 18 kilometer range. The second one is 36 kilometer range. But now we are working to take it to 48 kilometers range. We will let you know the recent development in the coming days. If you are ahead of the competition, if you are ahead in the future, there is nothing that you cannot do. As far as our capability is concerned, we are fully capable. We have full capacity. Our Humanity.
[Company Representative] (Goodluck India Limited): New plant.
Ram Agarwal: Our new plant is taking care of that new requirements of the defense industry. Near the time, we will let you know what new developments we are making in that. Be rest assured, if you are putting that INR 4 lakh plant, that is with the greater whatever flexibility, flexible plant, whatever care we would have taken, we have taken. We are assured that even after this INR 4 lakh, we may need to expand more. Because market is very, very volatile. International conditions are not for the defense industry, it is very right. Because, you know, three wars are going on. In Africa, there are 57 wars are going on, and there is no letdown in the wars. I am pretty sure that what we are doing, it will be fulfilled. What we want to do, it will be fully used up.
Jatin Chawla: Thank you so much, sir. Just quickly on Astra, last we spoke, you said that only the land allocation had happened and you were waiting for the license. Any update on that, and will you eventually consider to merge that in Goodluck as well?
Ram Agarwal: It is in very nascent stage. We are already connected to you. We are always connected to you. Let the new information come, we will let you know. Do not worry.
Jatin Chawla: Okay. Thank you, sir. I will get back in touch.
Operator: Thank you. A request to all participants, please restrict your questions to two per participant to allow everyone to ask questions. The next question is from the line of Deep Mehta from Bank of India Investment Managers. Please proceed.
Deep Mehta: Hi, sir. Thank you for the opportunity. First of all, I would like to congratulate the management for redesigning the group structure, which makes it a win-win proposition for everyone, including the minority investor. My first question is also regarding Goodluck Defence. Like you said that we are slowly, steadily inching upwards towards the product complexity, plus the demand of our product is very high as of now. So, what kind of realizations are we currently getting? Are we expecting any improvement in realization one or two years down the line when we make even more complex products?
Ram Agarwal: Sir, this realization we have maintained since beginning that it will be EBITDA margin of 30% to 35%, and our quarter-on-quarter, we are showing it is more. So, what we are trying, we are trying to be competent in the technology. As the technology moves ahead and we go with that, so realization are bound to increase, but definitely on conservative side, I will maintain that is 30%, 35% EBITDA, we will be maintaining throughout. It seems protection.
Deep Mehta: Sure. Regarding our capacity expansion from 1.5 to 4 lakh shells, are we broadly on track, or are we seeing any hiccups in the expansion?
Ram Agarwal: It is on the track. It has already started, and the earlier guideline we have given, we are likely to adhere to it. No condition.
Deep Mehta: Great, sir. Just one last question from my side. In our non-defence business, we have reached almost 99% capacity utilization. From this point onwards, in H2 as well as in next financial year, what kind of volume growth can we deliver? Will capacity be a question for that?
Ram Agarwal: So volume growth in this H1, we have given almost 18%. So, we are seized of the issue that our capacity utilization is 99%, so we are de-bottlenecking our processes, so it will increase our capacity further. Moreover, some improvement, some capacity we are adding in our precision tube, in our galvanized conduit tubes. So, there are small expansions which will eventually increase our capacity utilization, and de-bottlenecking is the main source of our capacity expansion.
Deep Mehta: Okay. Can we quantify the volumes of which we can achieve either this year or for next financially?
Ram Agarwal: This year we have done almost 463,000. And this financially 31 March. In terms of volume-
Deep Mehta: And-
Ram Agarwal: Yes. This-
Deep Mehta: FY27 and 28.
Ram Agarwal: We have done almost 255,000 tons. Am I clear or your question is different?
Deep Mehta: For future, for H2 as well as for FY28, what kind of volume growth can we do?
Ram Agarwal: The volume growth, we are expecting in the range of 15% to 20%.
Deep Mehta: Okay, sir. That is good to hear. That is all from my end. Thank you.
Ashok Vashisht: In terms of revenue, 15% to 20%, and volume, the way we are, like H1 we delivered, as Ram sir said, 13%, half yearly, and Q2 we delivered 18%. So, directionally, 15% to 20% year-on-year we will grow, in no difference.
Deep Mehta: That is good to hear. Thank you.
Ashok Vashisht: Yes.
Operator: Thank you. The next question is from the line of Rahul Gupta from Arya Rituj. Please proceed.
Rahul Gupta: Hello?
Ram Agarwal: Yes, sir.
Rahul Gupta: My first question is, what is the expected timeline for the proposed merger of Goodluck Defence with Goodluck India? When do you expect to complete all necessary proposals?
Ram Agarwal: It should take, as per the 12 to 15 months time. Normally, it should take. Because here,
Ashok Vashisht: There are several approvals involved from SEBI, from NCLT. If you see, this kind of merger, it takes generally 12 to 15 months. Anything better than that, we will see that. But actually, it is 12 to 15 months or 15 months.
Rahul Gupta: Okay. It is under process, no, sir?
Ram Agarwal: Yes, it is under process. It has already started.
Rahul Gupta: Okay, sir. Thank you, sir.
Operator: Thank you. The next question is from the line of Rohit from JM Financial. Please proceed.
[Analyst] (JM Financial): Yeah. Firstly, thanks for simplifying the structure. I had a couple of questions. Firstly, just wanted to understand the timeline on the non-defence capacity, which is expanding from 5 lakh to 6 lakh. The timeline on that, as well as the timeline on the defence from 150,000 shells to 400,000 shells. Also, with we getting into more of longer-range shells as well, what could be the peak revenue potential whenever this 400,000 shells gets operationalized? Yeah, that's it.
Ram Agarwal: For this non-defence business, taking capacity from 5 lakh to 6 lakh, it's a dynamic process. It is a continuous improvement process because, as I earlier told, de-bottlenecking is our main tool by which we increase our capacity. It is going on, but I hope that in next 12 to 18 months, we will be reaching to the desired capacity level. We will increase to 6 lakh, and we have to see in how much, in one or maximum two years, we should reach to the maximum capacity utilization in the increased capacity range. Your second question was for the ERFB.
Ashok Vashisht: Defense.
Ram Agarwal: For the defence. For the ERFB, it is whatever that it has already been developed. Now, peak revenue for the augmented capacity, it should be INR 1,000 crore plus.
[Analyst] (JM Financial): Sorry, did you say INR 1,000 crore plus?
Ram Agarwal: Yes, I said INR 1,000 crore plus.
[Analyst] (JM Financial): Okay, with a 30% to 35% EBITDA margin.
Ram Agarwal: Yes, we
[Analyst] (JM Financial): Also, you can scale this up to INR 1,000 crore by FY29, or do you want to put any timeline to that?
Ram Agarwal: We hope
[Analyst] (JM Financial): Just ballpark.
Ram Agarwal: It should be by that period.
[Analyst] (JM Financial): Okay. Also, just from a shorter-term perspective, in this quarter, obviously, we didn't see any revenues from the defence business. Just wanted to understand the lumpiness, or going ahead, will it be more structural, and hence every quarter you'll start seeing revenues coming from the defence business, or this will continue to be a lumpy one?
Ram Agarwal: Sir, defence business, I will not call it a lumpy business. It is a business of the same nature, because this business needs validation, inspections, and Government of India approvals. You never know, because there are many departments involved. You never know, even for export of one shell or even for export of one next shell, we have to pass through many departments. They may take 3 months, they may take 6 months, they may take 5 months, which are not under our control. Because again, government decides by the geopolitical position. Suppose the Russia-Ukraine war is going, so government may not allow. But in the near future, EU countries government may allow, in some countries government may not allow. So it is beyond our purview.
Ram Agarwal: This business will go like that, but on a yearly basis, yes, we can say that we will achieve our targets.
[Analyst] (JM Financial): Sure. Thank you. That is it from my end.
Operator: Thank you. The next question is from the line of Rudraksh Raheja from ithoughtPMS. Please proceed.
Rudraksh Raheja: Thank you for the opportunity, sir. Sir, I wanted to understand the market size in terms of volumes for this 155 mm shell. Could you quantify that on domestic and both export side? Maybe if data is available specific to M107, that would be also helpful.
Ram Agarwal: Sir, to be very frank, this data is a classified data, because this is a defence data. Nobody has access to it. Whatever data we have or anybody has, that is through the internet only. Some internet says it is a 5 million demand, some say it is a 9 million demand. I exactly cannot vouch for the quantity required, but yes, one thing I can vouch for, the inquiries we are getting, LOIs we are getting, that is more than our capacity. If we are putting up a 4 lakh capacity, we are getting inquiries more than that even for up to three years. I can very well estimate that the market size must be much, much bigger, because I am a very small player in this field.
Rudraksh Raheja: Got it. Got it, sir. A lot of players have announced capacities in this space, and we are very confident on expanding from here onwards and even beyond that, as you have mentioned. We may as likely expand beyond 4 lakh number as well. Do you see that there is any possibility or any indications that realizations are impacted in this business?
Ram Agarwal: Sir, realization is a function of market requirement. Realization may go from INR 50,000 to INR 40,000 or INR 60,000. But what I have told in this earlier question, because we are banking upon the technology upgradation. As we move from ERFB to the next, we move from 36 kilometer to 48 kilometer to 64 kilometer, because God has already reached to 127, but that cannot be vouched for, because that is from some quarter which cannot be discussed. We are doing, we are ahead of the business, what people are contemplating today. If we are ahead of the competition, we are ahead of the technology, so there is no worry for the excess capacity or for the new capacity to be absorbed in the market. That is my view.
Rudraksh Raheja: And sir, double-checking on this, inquiries are as strong on the higher capability shells as well, as strong on the basic version. Would that be fair to assume?
Ram Agarwal: Inquiries are definitely on the new version, but the old version is also being used because it depends on the type of war. Because now wars are not being fought on the border. Earlier it was 1 kilometer, 2 kilometers, now it is 30 kilometers. Earlier this Israel-Hamas, it was within 18 kilometer, M107 was going. But now Russia-Ukraine, it is now the 36 kilometer. So it will depend on the nature of war and what kind of shell they will need. We have the capacity and capability of all kind of 155 mm shells. From 105 to 155, we have all the capabilities. So we have not to worry for the same. Whatever market says, we will be there.
Rudraksh Raheja: Understood, sir. Understood. The major driver for all inquiries and demand is from the export side. Is that the correct understanding?
Ram Agarwal: Maximum it is export side.
Rudraksh Raheja: Got it, sir. Got it. Thank you so much for taking my question.
Operator: Thank you. A request to all participants, please restrict your questions to two per participant to allow everyone to ask questions. The next question is from the line of Harsh Vasa from SBI Capital Securities. Please proceed.
Harsh Vasa: Thank you so much for the opportunity, and congratulations, Ram sir and team, for the proposed amalgamation. The defense question has already been answered. I just had one question now. What was the capacity in hydraulic tube plants in Q2 FY27, and what would be our exit run rate for this year?
Ram Agarwal: I could not understand. Harsh, can you come again?
Harsh Vasa: Sir, I was just asking that what was the capacity utilization for the hydraulic tube plant in Q2 FY27, and what would be the exit run rate for this year?
Ram Agarwal: The capacity utilization in the hydraulic tube plant, it has moved to 65% to 70% now. In the coming months, in the coming H2 half, I hope it should show 75% to 80%, because now the demand is coming up in this sector.
Harsh Vasa: Okay, sir. And sir, any plans if once we I know it's a later part, but any plans if we reach 75% to 80%, we going to do another further 50,000 tons CAPEX? Are we going to come out with another 50,000 tons after reaching that?
Ram Agarwal: This we will decide after this H2.
Harsh Vasa: Okay, sir.
Ram Agarwal: When we put up, because it depends on this geopolitical condition.
Harsh Vasa: Okay, sir.
Ram Agarwal: This is a construction equipment, so whatever construction is going, it will decide how much construction has to go.
Harsh Vasa: Okay. Thank you, sir. All the best for the next quarter.
Operator: Thank you. The next question is on the line of Chintan Patel from PhillipCapital. Please proceed.
Chintan Patel: Thanks for the opportunity, sir. Sir, can you give us a breakup of capacity utilization of non-defence business?
Ram Agarwal: Pardon, you are slow. Can you come again? Your voice is slow.
Chintan Patel: Hello. Am I audible?
Ram Agarwal: Yes, now you are audible.
Chintan Patel: Can you give us a capacity utilization for the current quarter of non-defence business, segment-wise?
Ram Agarwal: It is almost 98% to 99% for the current quarter for the non-defence business.
Chintan Patel: What would be our revenue contribution coming from the railway business? We are already supplying a lot of aerospace names in the aerospace industry, big names. What would be the opportunity size in the aerospace? What are the programs going to be? Are we participating? Whether we are participating in AMCA, because the bidding is just likely to happen in the October end. What is our opportunity size on our aerospace side?
Ram Agarwal: In the aerospace, we are working with Safran. Our plant has been audited by Airbus, by Boeing, and many in the Indian condition. Because now, you know, however, for the new aerospace business, what we are talking about, it is too early to predict, but definitely, we are moving towards these three, four majors in the world, because India is becoming the hub of planes, in the airplanes, whether in terms of military planes or in terms of domestic planes. We have placed order of more than 1,500, and HAL is with the order of almost INR 950,000 crore orders he is having. An ecosystem is required. What we are trying to do, we are trying to fulfill that. We are trying to become that part of that ecosystem, because now the parts are required.
Ram Agarwal: For that, we are taking up this aerospace vertical, and near the time, we will update you again regarding this aerospace business.
Chintan Patel: Sure, sir. Sir, just last question. What is our overall capital investment in the defense side, especially the artillery cell side? Just the confirmation on the margin impacts due to the freight cost and the fuel cost would be around 150 bps for Q2 FY27, sir?
Ram Agarwal: Can you repeat your question, please?
Chintan Patel: What is the margin impact for freight cost and fuel cost? That is around 150 bps on EBITDA margin, sir?
Ram Agarwal: What is the question?
Chintan Patel: The earlier question is, what is our capital investment in the defense side?
Ram Agarwal: It is INR 300 crore plus.
Chintan Patel: INR 300 crore. Okay. Thank you, sir.
Operator: Thank you. The next question is from the line of Sanyam from Solidarity Advisors. Please proceed.
Sanyam Shah: Hello. Am I audible?
Ram Agarwal: Yeah, yeah.
Sanyam Shah: Yeah. Hi, sir. Thanks for the opportunity. I just wanted one clarification. Back in May 2026, we posted an order on exchange for INR 52 crores, which was for 20,000 shells. That was with a delivery timeline of 90 days, or maybe 3 months. So shouldn't that have been executed in this quarter itself? Or how does that work? I am just trying to understand when we say delivery timelines for orders is 90 days, so where does that 90 days start from?
Ram Agarwal: That order has been completed in the June quarter itself.
Sanyam Shah: Okay. Understood. And the recent order that we post-
Ram Agarwal: It will take some time, because it is under government approval, so it will take some time. The recent order was given to the state force.
Sanyam Shah: Is it related to the Munitions India tender?
Ram Agarwal: This is a separate Munitions India tender, Munitions India order, we have not just posted, because we have just to get the order so far. We have not got the order, but we have qualified for being the sole bidder for this MIL quantity.
Sanyam Shah: Understood.
Ram Agarwal: Once the order comes, we will update you all.
Sanyam Shah: Got it. Thank you. Sir, any clue on what ratio are we looking for the merger for Goodluck Defence and for Goodluck Green?
Ram Agarwal: So, see, this is a big exercise, and we have to undergo certain processes.
Ashok Vashisht: under the relevant statutes, which is going on. So we will be able to comment only on this once valuation is done. We have already appointed two Big Four firms for doing the valuation, and still they are working on that. We will share this at appropriate time once approved by the board, and then we will be here in such filing and sharing.
Sanyam Shah: Understood. So, one last question. We also expanded capacity in front fork tubes and conduit GI pipes in this year. So what is the status on that?
Ram Agarwal: Front fork tube expansion is nearly complete, and it will give you results in Q4. The conduit, it is just going on under expansion. It is under erection, and we will update once it becomes operational.
Sanyam Shah: Thank you. That is all from my side.
Operator: Thank you. A request to all participants, please restrict your questions to two per participant to allow everyone to ask questions. The next question is on the line of Ritika Sheth from Anantaya Wealth Advisors. Please proceed.
Ritika Sheth: Hello. Am I audible?
Ram Agarwal: Yes, please. Go ahead.
Ritika Sheth: Thank you for providing me this opportunity. Congratulations on the good set of numbers. My question is regarding the EBITDA margin for FY27. Are we still expecting the margins to be within the range of 10% to 12% as guided in Q1?
Ashok Vashisht: Yeah. If you are talking about consolidated basis, yes, what you are saying is right. On standalone basis, we could be between 9% to 10%, yeah.
Ritika Sheth: Okay. Can you provide segment-wise guidance for the contribution of revenue of each segment and their margins?
Ram Agarwal: Basically, I can give you a guidance from the value-added sector. It is almost in our EBITDA, it is 78%, whereas the volume is 68%. For the non-value-added sector, its contribution to EBITDA is hardly 22%, whereas the volume is almost 32%.
Ritika Sheth: Okay. For CR sheets and pipes, precision tube, and auto tubes, what would be the EBITDA margins that we can see going for this year?
Ram Agarwal: Actually, you are talking again of the two parts. One is the value added. Our precision tube becomes a part of our value added, where the EBITDA margin is normally in the range of 11% to 13%. The first part, it contains tubes and pipes, normal tubes and pipes, where it is normally 3% to 4%.
Ritika Sheth: Okay. Thank you so much.
Operator: Thank you. The next question is on the line of Tushar from Omega Portfolio Advisors. Please proceed.
Tushar Raghatate: Yeah. Thank you for the opportunity. Sir, just our interest in the aerospace business. Basically, we have AS9100 certification. There in the non-ferrous side of the business, we are working with titanium and Inconel as a material. I just want to understand the higher aspiration of the management. You mentioned that you are working with Airbus and Boeing. I just want, like, where do we see this aerospace business going in the next five years, and your view on that?
Ram Agarwal: Sir, basically, aerospace business, as you have already said, this is the business of these type of validations. It will take some time to come up. But we hope with this new investment of almost INR 80 crore for our aerospace business, we will be taking a business to INR 180 crore in almost four to five years.
Tushar Raghatate: Okay. And sir, on the defence business, are we working for this Ramjet artillery 155 mm shell?
Ram Agarwal: For the Ramjet, this technology, I understand this is with the military only. Whenever they give, they will open the portal, then only one can take it.
Tushar Raghatate: Okay. And sir, on the-
Ram Agarwal: Pardon?
Tushar Raghatate: Yeah. Sir, please continue.
Ram Agarwal: It was done by IIT Madras, and it was for the Government of India. So they have already delivered. Now, whenever the portal opens, then only one can put on that. Then one can bid for it.
Tushar Raghatate: Fair enough. And sir, this high-range artillery shell, like this ATAGS, K9 Vajra-T, and this Dhanush, if I am not mistaken, are we working on that front in terms of the high range of more than 50 kilometers?
Ram Agarwal: More than?
Tushar Raghatate: More than 50 kilometers range.
Ram Agarwal: 50 kilometers? No, till today, it is only 36, 38 kilometers for ERV. The new versions are in research.
Tushar Raghatate: Okay. Fair enough. Thank you, sir.
Ram Agarwal: Thank you.
Operator: Thank you. The next question is on the line of Amish from Knowise Investment Managers. Please proceed.
Amish Kanani: Yeah. Hi, sir. Congrats on the arrangement of the business the way, probably, minority shareholders would have wanted it. Sir, the first question is this MIL munition qualification. Sir, there was an article about there being qualified for a large export order for a Middle East country. We being a sole supplier, I was wondering how big is this Munitions India for them. I know we cannot disclose too much with respect to our clients or their exports, but to the extent it is in the public domain, if you can throw some light on how much is. They have already signed some $25 million of export opportunity in 2024 was one of the news article. How much of this we can cater to through these products? What is the typical exports that they do, which we can qualify?
Amish Kanani: I wanted to know, in our particular product category, we are the sole supplier, but in general, how many companies are kind of competing in these type of products, vis-a-vis MIL and the others?
Ram Agarwal: Well, basically, you have to understand, MIL is a DPSU. We don't have any information about that. Their information are classified. Whatever is available in the article, that is only known to us. What we are doing, we are making the empty shells and supplying to MIL. They will fill it and they will supply it. Where they will supply it, we don't know, because we cannot go into the details of MIL. But it seems that in the current geopolitical conditions, MIL should be a good exporter to the rest of the world, because Ministry of Defence is saying again and again that we have to improve the export. Once their export increases, so we are the supplier to them in one category, so our supply should also increase.
Ram Agarwal: As far as other categories are concerned, those other categories, whenever they give the tender, we will quote, and then it will be decided. It is totally on the tender basis.
Amish Kanani: Okay, sir. Should we be assuming these types of products being procured beyond the FY this year scope, and it is not included in the guidance of this year? I am saying, is the upside for FY28 is coming from this tender, as and when this tender opens and we get an order, sir? If you can just give some sense there.
Ram Agarwal: Sir, it is only my guess that in the coming years also, MIL will purchase these type of shells, and we will be there. But anything cannot be confirmed because it is a DPSU, and no information can be shared by us or anybody else, except the Government of India.
Amish Kanani: Okay, sir. The last question, sir. What is the date for this completion of 4 lakh this thing, sir, capacity? Are we comfortable that we will be able to utilize maximum in the first year of increased capacity, sir? If you can give that back sense, sir, that would be helpful.
Ram Agarwal: Already given our guideline that in the next financial year, Q3, it should be. Although it hasn't started, because it normally takes 12 to 18 months. I hope there should not be much delay in that.
Amish Kanani: Okay. Current base case is by next year this time, we should be starting, 12 to 15 months. Okay, sir. Okay, sir. Then we'll be able to do INR 1,000 crore plus from that facility is what you're saying, sir, right?
Ram Agarwal: It will also take some time to ramp up, sir.
Amish Kanani: Okay, sir. Okay. Yes, yes, sir. Yeah. Okay. Okay. Thank you a lot, sir.
Operator: Thank you. Due to time constraints, that was the last question for the day. I now hand the conference over to the management for the closing comments. Over to you, sir.
Ram Agarwal: Thank you, everybody. Thank you for the stakeholders. Thank you for the investors. Thank you for the shareholders who have participated in this conference and given us guideline for our future expansion. We always look forward for your support and trust in the management. Thank you.
Operator: Thank you. On behalf of Goodluck India Limited, that concludes this conference. Thank you for joining us, and we will now disconnect your line.
