01 — At a Glance
The Tube Company That Became a Weapons Manufacturer Overnight
- 52-Week High / Low₹1,353 / ₹592
- Q3 Revenue₹1,037 Cr
- Q3 PAT₹43.6 Cr
- Q3 EPS₹13.13
- Annualised EPS (Q3×4)₹52.52
- Book Value₹422
- Price to Book2.41x
- Dividend Yield0.39%
- Debt / Equity0.72x
- 52-Week Return+42.6%
Auditor’s Opening Note: Goodluck India, which spent three decades quietly manufacturing tubes, pipes, and bridges for railways and highways, suddenly decided that being boring was for underperformers. So they got a defence license in October 2025, started producing 155mm artillery shells in Q3 FY26, and by Q4 expect ₹60–70 crore in defence revenue. Meanwhile, the core business grew 10% in revenue with EBITDA margins expanding to 9.7%. Stock up 42.6% in 12 months. Analysts? Silent. Valuation? Still reasonable. India’s defence sector? Finally got a new player with actual manufacturing at scale.
02 — Introduction
How a Tube Company Became a Weapons Manufacturer (And Why That Matters)
Let’s rewind three years. Goodluck India makes cold-rolled sheets, precision tubes for vehicles, hollow sections for structures, and fabricated steel for bridges. Think of them as the unglamorous backbone of India’s infrastructure capex. Railways, highways, solar tracker systems, automotive OEMs — they all buy from Goodluck. The company has 500,000 MTPA installed capacity across six facilities. Stock was trading at ₹600–700. Dividend yield was 0.8%. Dividend payout was 8%. Life was consistent. Margins were 7–8%. ROE was 13–14%. Utterly, completely boring.
Then, in October 2025, everything changed. The defence ministry granted an industrial license to their subsidiary, Goodluck Defence and Aerospace Limited, to manufacture 155mm empty artillery shells. The company started trial production in November. By December (Q3 FY26), production had commenced but sales hadn’t flowed yet. The guidance? ₹60–70 crore defence revenue in Q4 FY26, then ramp-up to ₹200–300 crore annually once expansion is complete. Later, aerospace components. Eventually, ₹900–1,000 crore combined revenue.
For a company with ₹1,037 crore quarterly revenue today, that’s not a side project. That’s a major inflection point. The concall on February 16, 2026 laid it out in brutal detail: capex ₹400 crore, timeline 12–18 months, EBITDA margin 30–35% for shells (vs. 9–10% core business), and demand “outstripping supply for the next 4–5 years.”
So, let’s break down what happens when a tube company becomes India’s newest artillery shell manufacturer, why the markets haven’t fully priced it in yet, and whether you should care.
Concall Insight (Feb 2026): “Demand is outstripping the production… clearly a gap. India needs 48 lakh shells per year… nobody can supply.” — Management. Translation: they walked into a market with structural undersupply and zero domestic competition. It’s like being the only guy selling chai at a railway station. Business 101.
03 — Business Model: Tubes, Shells, and Solar Trackers
Four Businesses Hiding Inside One Angry OEM
Goodluck’s core business splits into four revenue streams. First, Engineering Structures & Fabrication (23% of revenue): They build railway & road bridges, girders, boiler structures, and infrastructure supports. Clientele includes Indian Railways, L&T, Reliance, PowerGrid, and NTPC. These are long-gestation, working-capital-intensive projects, but margins are stable 8–10% once you’re in.
Second, Forgings (16% of revenue): Defence flanges, aerospace components, gear rings, and shafts. They supply DRDO, ISRO, HAL, GE Oil & Gas, and major EPC contractors. This segment was sleeping until the defence license arrived. Now it’s the turbo charger.
Third, Precision Pipes & Auto Tubes (25% of revenue): Cold-drawn (CDW) and electric-resistance-welded (ERW) tubes for automotive OEMs like VW, Audi, BMW, Skoda, and domestic players like Ashok Leyland and Tata Motors. This is bread-and-butter stuff. Steady 9–10% EBITDA margins, ~40 lakh tonnes annual demand globally, India supply growing steadily.
Fourth, CR Sheets & Pipes (36% of revenue): Cold-rolled coils, corrugated sheets, GI pipes, and hollow sections. Used in railways, bridges, and industrial structures. The commodity of the commodity, but volumes are massive and pass-through on steel pricing helps margins in good times.
Then there’s the wild card: Defence Shells (0% of revenue today, targeting ₹200–300 crore annually). The subsidiary was commissioned in January 2025 (hydraulic tubes facility). By October, it got a defence license. By November, it started production. By Q4, it will contribute ₹60–70 crore. By Q1 FY27, full ramp-up. The economics? 30–35% EBITDA margin on 155mm empty shells. Compare that to the core business’s 9–10%. That’s a 3x margin uplift.
Core EBITDA9–10%Stable 3yrs
Defence Margin30–35%Target range
Capacity Util.92%Standalone ops
Defence Capex₹400 Cr12–18 months
The Chairman’s Confidence Play: In the concall, the Chairman stated: “India needs 48 lakh per year… nobody can supply.” He wasn’t being diplomatic. He was saying they’ve walked into a monopoly market. Their initial 150,000-shell capacity will scale to 400,000, then add aerospace. The company is not just ramping production; they’re building India’s new defence supply chain.
💬 Quick thought: If defence shells are 30–35% margin vs. core 9–10%, why isn’t the stock price already up 2x? Is it because street doesn’t believe the ramp, or does the market just move slowly?
04 — Financials Overview
Q3 FY26: The Baseline Before Defence Madness
Result type: Quarterly Results (Standalone) | Q3 FY26 EPS: ₹13.13 | Annualised EPS (Q3×4): ₹52.52 | Full-year FY25 EPS: ₹50.59
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 1,037 | 942 | 991 | +10.1% | +4.6% |
| EBITDA | 101 | 82 | 92 | +23.2% | +9.8% |
| EBITDA Margin % | 9.7% | 8.7% | 9.3% | +100 bps | +40 bps |
| PAT | 43.6 | 40.9 | 41.3 | +6.5% | +5.6% |
| EPS (₹) | 13.13 | 12.51 | 12.75 | +4.9% | +3.0% |
The Story Within the Story: Q3 looks incremental: +10% revenue, +6% PAT. Yawn. But dig deeper. Volume was +8% YoY (not pricing). EBITDA margin expanded to 9.7% — the highest in quarters. And remember: this is before defence contributed a single rupee to the P&L. Defence production started in Q3 but sales didn’t flow (pending government dispatch permission). Q4 will show ₹60–70 crore defence revenue at 30%+ margin. That will move the needle. Annualised EPS at current trajectory would be ₹52.52, but full-year FY25 EPS was ₹50.59. So we’re already growing. But once defence ramps? All bets are off.
05 — Valuation: Fair Value Range
What’s This Company Worth When Defence Revenue Isn’t in the P&L Yet?
Method 1: P/E Based (Core Business)
Annualised EPS FY26 ~₹52–53. Core business P/E justified 14–16x (industrial manufacturing + infra exposure). Fair P/E band: 15x–18x (conservative). Defence not yet in multiple.
Range: ₹780 – ₹954
Method 2: EV/EBITDA (Core + Defence Visibility)
TTM EBITDA ~₹370 Cr (9% margin on ₹4,116 Cr TTM revenue). Enterprise Value ~₹4,339 Cr. EV/EBITDA = 11.7x. Peers trade 11–14x. Adding incremental EBITDA from defence (₹60–70 cr in Q4 @ 30% margin = ₹18–21 Cr; FY27 run-rate ₹50–60 Cr) increases TTM EBITDA to ~₹420 Cr. New EV/EBITDA ~10.3x (very reasonable).
Adjusted EV (10.5x–13x): ₹4,410 Cr – ₹5,460 Cr → Per share (at 332.8 cr shares):
Range: ₹1,025 – ₹1,270
Method 3: DCF (Conservative Defence Ramp)
Base case: Core EBITDA stable ₹370 Cr. Defence adds ₹50 Cr EBITDA by FY27, ₹100 Cr by FY28 (conservative vs. management ₹200–300 cr revenue guidance). Growth 6–8% core, 20%+ defence. Terminal growth 3%. WACC 11%.
→ PV of 5-year FCFs (core + defence): ~₹3,600 Cr
→ Terminal Value (3% growth / 8% cap rate): ~₹5,200 Cr
→ Total EV: ~₹8,800 Cr (minus ₹1,009 Cr debt = ₹7,791 Cr equity)
Range: ₹960 – ₹1,180
Fair Min: ₹780
CMP: ₹1,015
Fair Max: ₹1,270
⚠️ EduInvesting Fair Value Range: ₹780 – ₹1,270. CMP ₹1,015 sits in the lower-middle of the range. This valuation assumes defence EBITDA contribution remains conservative (₹50–100 Cr by FY28). If management executes on ₹200–300 Cr defence revenue, fair value expands materially. This range is for educational purposes only and is not investment advice.
06 — What’s Cooking: News, Triggers & The Defence Inflection
155mm Shells. USD 6 Million Orders. Expansion to 400k Shells/Year.
