Goodluck Defence & Aerospace Unlisted Shares

GOODLUCK DEFENCE & AEROSPACE :

Goodluck Defence & Aerospace Limited is an unlisted defence manufacturing company, with its unlisted share price currently trading at around ₹438 per share. Incorporated in August 2023 as a subsidiary of Goodluck India Limited, the company was established to manufacture artillery shell bodies, ammunition components, and precision-engineered defence products for both domestic and international markets. It currently holds industrial licences to manufacture 105 mm, 120 mm, 125 mm, 130 mm, and 155 mm artillery shell bodies.

The company commenced commercial production in October 2025 with an installed manufacturing capacity of 150,000 artillery shell bodies per annum. Leveraging the engineering expertise and manufacturing capabilities of Goodluck India, it is strategically positioned to benefit from rising global demand for artillery ammunition, increasing defence exports, and the Government of India’s Make in India and Atmanirbhar Bharat initiatives. With plans to expand capacity to 400,000 shells per annum, Goodluck Defence aims to establish itself as a leading private-sector supplier in India’s rapidly growing defence manufacturing ecosystem.

Business:

Goodluck Defence & Aerospace Limited operates as a specialized defence manufacturer focused on the production of empty artillery shell bodies used in military ammunition. The company holds industrial licences to manufacture 105 mm, 120 mm, 125 mm, 130 mm, and 155 mm artillery shell bodies, catering to both domestic defence requirements and export markets.

The company currently manufactures only empty shell bodies, while the filling of explosives, integration of fuzes, and final ammunition assembly are undertaken by licensed ammunition manufacturers and defence agencies. This allows Goodluck Defence to focus on high-precision metal forming and machining, where it leverages the engineering and manufacturing expertise of its parent company, Goodluck India Limited.

To strengthen its presence across the defence value chain, the Goodluck Group has also incorporated Goodluck Astra Limited, which will manufacture explosives, fuzes, and complete ammunition systems. However, Goodluck Astra is a separate group company, and its financial performance will not directly contribute to Goodluck Defence & Aerospace.

Industry Opportunity

The global defence industry is undergoing a multi-year growth cycle, driven by rising geopolitical tensions, military modernization programs, and increasing defence expenditure across major economies. According to the Stockholm International Peace Research Institute (SIPRI), global military spending reached a record US$2.72 trillion in 2024, creating significant opportunities for manufacturers of defence equipment, ammunition, and military components.

One of the fastest-growing segments is artillery ammunition, particularly 155 mm artillery shells, which have become the standard calibre for NATO and several allied countries. Ongoing geopolitical conflicts, including the Russia-Ukraine war, have exposed a significant imbalance between global demand and manufacturing capacity. During its investor conference call, Goodluck Defence’s management stated that annual global demand for artillery shells is estimated at 6–7 million units, while current production capacity is only around 3–4 million units. This supply deficit has prompted governments worldwide to increase domestic production, diversify procurement sources, and encourage private-sector participation in defence manufacturing.

India is also accelerating its defence manufacturing ambitions under the Make in India and Atmanirbhar Bharat initiatives. The Government has set a target of achieving ₹3 lakh crore in annual defence production and ₹50,000 crore in defence exports by FY29, supported by higher indigenous procurement, increased private-sector participation, and a growing focus on defence exports. These structural tailwinds are expected to create long-term growth opportunities for Indian defence manufacturers such as Goodluck Defence & Aerospace, which is expanding its production capacity to address both domestic and international demand.

Goodluck Defence & Aerospace Order Book

Goodluck Defence & Aerospace has secured its first major domestic order worth ₹255 crore for the supply of 155 mm artillery shell bodies, providing a strong foundation for its commercial operations. The order is scheduled to be executed over the next 10 months, offering healthy revenue visibility for FY27 while validating the company’s manufacturing capabilities.

Based on management’s estimated average realization of around ₹26,000 per shell, the order translates to approximately 98,000 artillery shell bodies, representing nearly 65% of the company’s current annual production capacity of 150,000 shells. This high capacity utilization is expected to support production ramp-up and improve operating efficiencies.

Financial Performance & Guidance

Although Goodluck Defence & Aerospace is in the early stages of commercial operations, the company has reported a strong initial financial performance. In FY26, it generated ₹46 crore in revenue and ₹29 crore in EBITDA, translating into an EBITDA margin of approximately 63%.

Management has indicated that the FY26 margin was influenced by the initial production phase and product mix. As production scales, EBITDA margins are expected to normalize to 30–35%, which management believes is a sustainable long-term range. For FY27, the company has guided for ₹250–300 crore in revenue, driven by higher capacity utilization, execution of its existing order book, and new order inflows.

Unit Economics

Goodluck Defence’s unit economics provide an insight into the profitability of its artillery shell manufacturing business. Based on management’s FY27 guidance, if the company generates ₹250 crore in revenue with an EBITDA margin of 30%, EBITDA would be approximately ₹75 crore.

Assuming 80% utilization of the existing 150,000-shell annual capacity, production would be around 120,000 shells. This translates into an estimated revenue realization of approximately ₹20,800 per shell and an EBITDA of around ₹6,250 per shell.

Based on FY26 financials, however, the implied realization was closer to ₹26,000 per shell, indicating that actual realizations may vary depending on product mix, customer contracts, and order pricing. These estimates are illustrative and should not be considered management guidance.

Capacity Expansion

To address the growing demand for artillery ammunition, Goodluck Defence plans to increase its manufacturing capacity from 150,000 artillery shell bodies per annum to 400,000 shells per annum, adding an additional 250,000 shells of annual capacity.

The expansion will involve a proposed investment of approximately ₹400 crore. To support the project, Goodluck India Limited has approved a corporate guarantee of ₹275 crore in favour of HDFC Bank for the term loan being raised by Goodluck Defence & Aerospace.

The expanded capacity is expected to strengthen the company’s ability to execute large domestic and export orders while improving economies of scale.

Long-Term Revenue Potential

Management believes the planned capacity expansion could significantly increase the scale of the business. During the earnings call, it indicated that the defence business has the potential to generate around ₹900 crore in annual revenue after the expanded facility becomes operational, while maintaining EBITDA margins of approximately 30%.

At this level, the business could generate an estimated ₹270 crore in annual EBITDA, reflecting the operating leverage of higher production volumes. However, these figures represent management projections and will depend on successful capacity expansion, timely execution of orders, sustained demand, and the company’s ability to secure additional domestic and export contracts.

Goodluck Defence &Aerospace unlisted shares  to IPO  Plan :

Management has indicated that Goodluck Defence & Aerospace is targeting an IPO in FY28–FY29, subject to market conditions and regulatory approvals. The company plans to scale its manufacturing capacity, execute its growing order book, and strengthen its financial performance before filing the Draft Red Herring Prospectus (DRHP). The proposed IPO is expected to support the company’s next phase of growth and expansion.