Goodluck India Ltd

KTA from Goodluck India Plant Visit and Management meet:

~ Goodluck India has entered into a strategic partnership with an undisclosed european player for Tracker Tubes production.

~ There used to be export of 6,000 Tonnes of tubes in total around the world to USA annually, which have reduced the exports from other countries to US significantly since the US government gave subsidies to local providers.

~ There is a continuous demand for GI pipes which are higher margin product. Company plans on take the current GI capacity from 4,100 Tonnes to 8,000-9,000 Tonnes.

~ Goodluck India currently has 1,500 tonnes per month tracker tube capacity. Company is currently working on replacing lower value added tubes with higher margin tracker tubes.

~ Company exports in Precision tubes are mostly related to Automobile players. Goodluck is one of the monopoly supplier to Auto players such as Bajaj, Mahindra, etc. in India. 3 months of Auto & Steel tubes are maintained at the plant of around 500 Tonnes.

~ Company faces no competition from European and Chinese players in CDW pipes.

~ Goodluck India has tied up with one of the largest company from US and Canada for marketing and production of precision tubes to countries like US, Mexico and Canada.

~ Company has an Order Book cycle of 6 months in Engineering Structures division. Engineering structures are not pre-fabricated and most of applications are in Bridges, Telecom, Power, etc.

~ The time period for execution of the Bullet train project is 18 months plus company has received a new order from Chennai metro.

~ Sales guidance (Overall): FY24 – INR 3,500 crores and FY25 – INR 4,200 crores.

~ Most of the company machineries used in production process are imported from Europe.

~ Goodluck is the 2nd largest player in after Tube Investments which is 2-3x in capacity plus a dominant player in the domestic markets and Pennar Industries is also one it’s competitors in India.

~ The company has planned a Capex of INR 100+ crores in the Forgings division.

~ Machinery used for forgings costs around INR 4 crores each.

~ Capacity Utilization (Forgings): Company has 42,000 Tonnes of Capacity of which 30,000 tonnes is being produced at current.

~ The size of an order in Order Book ranges from INR 10 lakhs to 50 crores in forging segment.

~ In the forgings space, company is experiencing robust demand in Oil & Gas segment. Oil Refinery company needs to replace the refinery units below the sea water every year as those get eroded due to salt water and the company foreseeing a huge demand from Oil & Gas companies based out of Gulf nations. Plus, the approvals are pending from companies such as Shell, TOTAL, Exxon, etc. Company is also in talks with Saudi Aramco (one of the largest oil companies in the world) to onboard as one of it’s clients in the forging division.

~ Sales Guidance (Forgings): FY24 – 650 crores, FY25 – 800 crores and FY26 – 1000 (targets to double from INR 502 crores in FY23 in next 3 years).

~ After setting up of new capacities at the Dadri unit, forgings EBITDA from new units will be in the range of 35-40%.

~ Company currently forays into major sectors such as Nuclear Power, Aerospace, Defense and Oil & Gas in forgings division. Few of the listed competitors of Goodluck India in Forgings division are Bharat Forge, Ramkrishna Forgings, MM Forgings, etc. and it is still a small player in this segment compared to rest of the players.

~ The company’s maximum forging unit is upto 25 Tonnes for a single order and has forged 22 Tonnes maximum for one of it’s clients. The heavier the forgings the higher the realizations are for the company.