Goodluck India Limited (530655) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Q2/H1 FY 2024 Earnings Conference Call of Goodluck India Limited. We have with us today Mr. M.C. Garg, Chairman; Mr. Ram Aggarwal, CEO; and Mr. Sanjay Bansal, CFO from Goodluck India Limited. [Operator Instructions] Please note that this conference is being recorded. Incorporated in 1986, Goodluck India Limited is a reputed and established precision engineering and steel products company having an experience of over 3 decades. The company is headquartered in Ghaziabad and has 6 manufacturing units with a combined capacity of 4,12,000 MTPA. Its manufacturing units are located in Sikandrabad, Uttar Pradesh and Kutch, Gujarat. Goodluck's value-added product segments includes engineering structures and precision fabrication, forging, precision pipes and auto tubes and CR coils, pipes and hollow sections. The company's products find application in high-margin, high-growth downstream user industries, namely, aerospace, defense, automobile, construction, et cetera. The company is ISO 9001:2008 certified and has a state-of-the-art NABL ISO/IEC 17025 accredited quality testing lab. As of date, Goodluck products are exported to over 100 countries and it has around 600-plus customers. I would now like to request Mr. M.C. Garg, Chairman, to welcome the attendees. Thank you, and over to you, sir.

Thank you. Good morning, everybody. I welcome you all in the con call for the H1 FY '24. I really thank you all for your unwavering support and [indiscernible] belief -- hello, can you hear me, sir?

Yes, sir, please go ahead.

Your belief in company mission has been instrumental in our continued success. Without your support, it would not have been possible. Together, we have embarked on a remarkable journey of transformation and growth at the heart of our company [indiscernible] like an unwavering commitment to provide maximum value to all our stakeholders. We take pride in being India pioneer and leading specialized Indian product company, engaging, converting [ religiously ] into quality Indian products. We are a high-value engineering product manufacturing present in precision tube, forging, inspection structure and GI pipes. What gives us adequate strength and [indiscernible] is 3 decades of experience in manufacturing steel products, our strong manufacturing provisions team and total installed capacity of 4,12,000 tonnes MTPA in our Sikandrabad manufacturing unit, 1 in Gujarat, 5 in Uttar Pradesh. It has been possible because the promoter are educated in IIT, most of them. A global footprint with exports to almost 100 countries. Since '92, we have been an export-first company and state-of-the-art quality testing we have in almost -- in all the plants. The results of the half year are in your end. You will note that PAT has gone up by 55% year-on-year basis, whereas volume has grown up by 20%. EBITDA has grown 44%. Goodluck India Limited has shown strong performance in Q2 FY '24 and H1 FY '24 with a strong focus on sales, production and profitability. Our strategic move is to raise capital of INR 96 crores through issuance of shares and warrants on a provisional basis and incorporation of a wholly owned subsidiary, Goodluck Defense and Aerospace to act specifically on building in the defense sector, which will have far-reaching impact on the company's growth trajectory. This half year under review was characterized by unfavorable global economic environment and ongoing market volatility with the effect to commodity price shocks and tight supply chains. Demand for materials also being supplied resulted in huge impact in pressure and also led to [indiscernible] growth barrier to trade. But your company has weathered and marched past with flying colors out of -- with all the problems around us. Our engagement [indiscernible] infrastructure development [indiscernible] supply to domestic infrastructure, company led us to gain prestigious contract of expansion [indiscernible] project, the deliveries of which have started last month. Further expand our market share, we therefore decided to release business in renewable energy, road safety and infrastructure for railway and highways to protect sustainable growth. Also, it is -- I would like to mention that we have entered into a joint agreement with one of the [ esteemably ] very famous European manufacturer for the [indiscernible] and road safety projects. With India poised to become the third largest economy worldwide by '27-'28 and [indiscernible] goal with manufacturing up with China Plus One, we are fully geared to [indiscernible] the demand for powering steel and speed and scale over the next 3 years. [indiscernible] such as hydraulic pipe will remain our top priority given the domestic and global potential. For this, we are actively investing INR 170 crores [indiscernible] from 50,000 MTPA to 130,000 MTPA. This plant is likely to be commissioned in the first quarter of the next financial year. As we move forward on this journey, our expertise, experience [indiscernible] will enable us to deliver our growth and value. Through innovation [indiscernible], we intend to create lasting value for our shareholder, partners and society in general. Goodluck India is fully committed to heights, [ stand ] our corporate governance, sustainability and corporate social responsibility. I take this opportunity to acknowledge and thank everyone for their support. The Board and management are committed to ensuring that our trajectory of business growth, financial returns and sustained value continues. Also, I thank the Board member for their support and valuable contribution in powering a new India, and we expect your continued support in the future. With various investments and transformation process, we are establishing our values to become an enduring enterprise to deliver future results to all of our shareholders. Now I hand over the conference over to Mr. Ram Aggarwal, CEO of Goodluck India Limited.

Welcome, everybody. I would like to apprise you of the developments in the company. Our strategy is to maximize our bottom line as well as the top line. Today, as earlier speaker has told, we are engaged in manufacturing and export of wide range of high-value engineering steel products, including engineering structures, forgings, precision tubes and which are catering infrastructure, solar, aerospace, defense components, auto, railways, solar and oil and gas industry being our sunrise sectors. For Goodluck, this was a historic H1 with several landmark developments in our progressive journey. Our strategy to enhance resilience in an environment of uncertainties contribute to our strong performance. Despite the challenges, we reported robust growth, driven by our strategic focus on high-margin, value-added product, high-growth sectors, which help improve our bottom line. We took a strategic decision to transition towards solar energy to fulfill our electricity requirement at our plants in Uttar Pradesh because today everybody is talking zero carbon. Somebody is giving 2030, somebody is giving 2047, So your company has put up a step forward in this regard. With this significant step, we are expecting to offset over 300 million kg CO2 emission during the project's technical lifetime, which is equivalent to planting over 60,000 trees. In another strategic development, we made significant inroads into road safety products by collaborating with a foreign company. Further, OEM customers, our primary USP, we undertook several brand-building initiatives this year to identify new markets, increase our presence in existing markets both in India and overseas to serve our predominant customer segment. The ability to -- this is our -- I may call it my our USP, ability to constantly shuffle markets and also our product mix helps us cater to evolving needs of our large customer base, both India as well as overseas. We worked out the strategies to maximize bulk carrying of raw material to keep [indiscernible] under one check. This [indiscernible] also ensured value addition in existing products and help us explore new market destination while allaying market pressures during market volatility. We have evaluated options to avail an advanced [ feed ] from our customers against raw materials to manage our working capital adequacy. To ensure superior quality standards across all our manufacturing products, we have imbibed the zero tolerance policy across all of our verticals for every employee, undertaking [ a level of ] study of machines and everything we are doing. Capacity utilization is one of the points we are taking most of the care. Additionally, consistently assessing and enhancing our production facilities, conducting R&D for new products with the same asset base as well as machine mechanizing and digitalizing our manufacturing operations collectively led to cost reduction and enhance our efficiency. The Navision software we introduced in all verticals provided us with a competitive edge in market analysis and introduced proactive action towards setting new opportunities. We upgraded our [indiscernible] for global standards to develop new shapes and sizes of our tubes, which is the darling of the market right now. We also undertook various training interactive programs for our employees to help them grow and become our partners in our growth story, too. So basically, we are aiming for the all sides growth, where our customers, our employees, everybody is a partner. Value-added products will continue to be our driving force for future growth. We are working on value addition in high-volume, low-margin GI pipe business. Our aim is to add more value-added [indiscernible] products to our product portfolio by upgrading regular products. We are working on expanding the capacities of our high value-added product segments. We are expanding our value-added vertical while also transforming our low value-added to high value-added products, which shall also capitalize on our strength in supplying high-quality material through defense and aerospace, oil and gas, railways and other key sectors in India. With newly added capacities and measures undertaken to turn around GI business, we are well positioned to benefit from the government's planned infrastructure spending over the next few years. And lastly, we will continue maintaining our strong focus on increasing our EBITDA margin and optimizing our capital structure to maximize our shareholders' returns. We will continue to invest in [ equilibrium ] equipments to enhance our productivity. We will continue reshaping our product and market mix through flexible marketing strategies to further enhance our operational efficiency and enhance our EBITDA margins. Going forward, the rising demand for steel, favorable government policies and the conductive business environment are expected to result in even brighter future for your company. Now I hand over this conference call to Mr. Sanjay Bansal, CFO of company, for a review of our financial performance for H1 FY '24. Sanjay?

Thank you, sir. Good morning, everybody. At the outset, I'm Sanjay Bansal, CFO. On behalf of Goodluck, welcome you all for joining us for conference on performance of the company in quarter 2 and first half year financial year 2024. Regarding quarter 2 performance. Stand-alone sales was increased to INR 885.99 crores as against INR 779.20 crores during quarter 2 of previous year, registering a growth of 14% about. However, EBITDA for the quarter stood at the rate of 8.3% of the sales of INR 73.68 crores as against INR 51.37 crores during quarter 2 of previous year. The profit before tax, including other comprehensive income was at INR 45.96 crores in quarter 2 as compared to INR 27.95 crores in quarter 2 of previous year. However, PAT in quarter 2 of current year was INR 34.70 crores as against INR 28.59 crores in quarter 2 of current year, registering a growth of 21% Q-o-Q basis. The performance of the company in H1 of current FY 2024. The sales has been increased by 9%. EBITDA margin has improved INR 144.55 crores with EBITDA margin rate 8.29% of net sales as against 6.53% during last 6 months of financial year 2023. However, the PAT margin has increased INR 63.29 crores, registering a growth of more than 50% as compared to first half of the previous year. The earnings per share has been at INR 12.73 per share in quarter 2 of current year as against INR 7.83 per share during quarter 2 of previous year. However, EPS of the company in 6 months of current financial year for stand-alone was at INR 23.22 per share. On financial front, our interest cost has marginally gone up due to increasing level of activity during first 6 months of current year as compared to previous year. Also, employee salary and benefits have been increased due to annual increment and increasing level of activity this year as compared to previous year. Thank you very much.

[Operator Instructions] Our first question is from the line of [ Aditya Jhawar ] from [ AG Capital ].

Great set of numbers from the management. I have a couple of questions, firstly related to working capital. You see the working capital is stretched. So I want the breakup of working capital in each segment. Which segment is taking the bulk of working capital. That is the first question.

You see, working capital segment-wise detail is not readily available. But overall, working capital requirement is within the norm of the industry and it is perfectly being operated and up to the mark as far as fund availability is concerned. Thank you.

What is the working capital base currently?

Working capital, total fund-based or nonfund-based, both are INR 600 crores.

Yes. In days?

Pardon?

In days, number of days.

Number of days. Number of days is 40 days about.

Okay. Any plans to decrease this working capital or this will be steady, this number?

Always we try to decrease the working capital.

Okay, okay. And the second part is, if I see your data, I think forging and precision is having the high-margin business and the other two are dragging. So how do you see going forward our margins coming? Currently, it is at 8%. Can we achieve 10% margin? That is the first question. And the second question is if you see your mixing a bad business with the good business. So is there any time line to demerge? Because we are having a lot of companies under one roof. So there are any plans of demerging the different results to get the value accretion for the shareholders?

Sir, basically, if you see, there is no bad business we have. As I had already stated that the GI business, which you are saying it is a low-margin business, we are just transforming it into a solar business, which is a high-margin business. So there is a process of transformation of the product, which are taking lesser EBITDA. We are trying to convert it into a higher EBITDA with the same assets. You just go through my speech and there I have specifically told it.

What are the EBITDA per...

It's not on the table. The demerger plan is not only table because most -- our all the verticals are doing good. And the verticals, which are having a big issue, we are transforming it. So the demerger is not on table right now.

And margin guidance for the next 1 or 2 years?

So basically right now, this year we will be almost 8.4%, 8.5% EBITDA. And in the coming 2, 3 years, it will be reaching to 9.5 plus.

Okay, 1%. So basically, there is a mix change? Or it will be basically GI pipes also contributing?

It is a change of the product profile basically what we are doing. And value addition will be giving more; and the lesser valuation, it will be giving less. [ Goal is that the margin will increase ]. This quarter is itself showing. Our sales have increased by 20%, but whereas our profit [ is showing ] 70%. So what we are doing? Transforming business. Because there are new opportunities in the market and we are taking those opportunities but using our same what we have. The asset base, we are having the same. So margins are increasing.

And the long-term debt, are we trying to decrease?

Definitely, we are -- every year some long term is going back, it is being repaid.

In the next 2 years, there is a plan to decrease significantly by 50%?

Yes. We always aim that the long term should be 0. But particularly, it is not possible. So -- but we will try. We are trying.

On the revenue part, this year, it is INR 3,500 crores. In the next year, it is INR 5,000 crores. Do we stand with that assumption?

This year, it should be INR 3,500 crores. Next year, it should be INR 4,000 crores. And then it should be INR 4,500 plus because the third year I cannot see right today.

Our next question is from the line of Darshil Pandya from Fininterest Capital.

We know that you don't give an order book status, but any visibility or the last time that you gave on all the segments?

Basically, we have 5 verticals and every vertical has a different order book side. But in aggregate you will see, so there in the order book of almost 3 to 4 months in the regular products. And where we have infrastructure project, there is an order book of [ dependency ] of 9 months to 1 year.

Okay. Perfect. And sir, on the -- I would like to hear some more developments from defense and solar. What is the thought process of the management of these 2 segments where you are seeing some good traction?

Basically, solar, everybody is looking to solar because thermal capacity, thermal power, nobody wants to use. And with the power -- with this stuff that's going on, everybody wants less reliance on the oil. So solar is definitely and we are having an edge because we are doing it [indiscernible] where it's a new field. But everybody is trying to put gigawatts in terms of these tracker tubes. And we are pioneering making the tracker tubes. So in solar, we look forward in the coming 2, 3 years it will transform to -- right now business, what we are doing is about INR 50 crores. So it will be 10x business in next 3 years in terms of solar. And it depends what you have asked, it depends, definitely, we have been working for last 4, 5 years. We're making some products for the defense because they are prototypes. Prototypes are made and then order comes, it's a slow process. But we have been doing with many products. And now we understand that it's the time to go for a big production for scaling up. So we will be making more products in our Goodluck Defence and Aerospace in the coming years.

And sir, any -- have you seen any shift in the export business as a percentage of the total revenue?

Percentage of our core business will remain same. With the growing volume, the volume export will grow, but percentage may not grow much.

Okay. All right. And one last question, if you say. Sir, what is the current -- on the new plant that is coming up on Q1 FY '25, what is the current status of that? Last time we had, it was -- the land was purchased and all the permission...

Land acquired and developed. The building is coming up, which will be ready by December. And the plant [ direction ] should start by end of January. And we should -- we are right on track to commission the plant in the first quarter of the next year.

And how much time does it take to come up with the optimum utilization level?

The ramping up will take many years.

Our next question is from the line of [ Piyush Agarwal from SOIC LLP ].

So sir, first question was what is our capacity expansion planning each and every one of our divisions? Because in forging, you are also doing some capacity expansion. Can you just list the numbers on capacity?

Basically, our total [ cash ] installed capacity is 4,12,000 tonnes, what we have given. And it can be divided in 5 verticals. So the division, we can give you later on. You can go with the other question because...

So just for our understanding, in what holding unit is the precision engineered tubes? So precision engineered tubes, we have the capacity expansion plan. What other capacity expansion plans in the forging units especially?

Look, in forging units with aerospace and defense is an addition to the forging capacity only. All the items which we'll be making for aerospace and defense will be adding to the forging capacity only. As on date, our capacity of forging is 30,000 tonnes, which is likely to go up to 50,000 tonnes in next 2 years after commissioning of this aerospace and defense plan. It would take 1.5 years.

Right. And sir, what is the EBITDA per tonne that you are doing in the forging unit right now? Do we expect that to increase?

Right now, it is 12% to 13% in forging. And the product, initially, it will increase in the coming years.

Right. And if you're targeting this defense vertical, don't you think that the working capital will stretch a bit more on that will be compensated by the margin side?

I'm not able to hear you. Can you repeat your question?

Sir, this defense vertical in the forging unit that we are targeting. Don't you think that our working capital will increase a bit or will be that compensated by the higher margins that we...

Definitely. Definitely, higher margins will reduce the working capital requirements.

Right. And sir, last one question from my side. After all the CapExes are done and all the value addition will be done, do we expect our EBITDA margins on a consolidated basis to start increasing in next 1 or 2 years?

Our aim is to increase the EBITDA margin progressively, which you are finding the trend for last 1 year. And it will continue at least for next 2 years, I can see the margins are -- EBITDA margin are going to improve. Our aim is to achieve a 10% EBITDA margin in next few years or 9.5% to 10%.

Our next question is from the line of [ Rohit Pawar from RB Investments ].

Sir, my question is in accordance to the GatiShakti National Master Plan, we are pleased to be a significant player. So may I know the competitive advantages regarding to this?

I could not understand. Can you repeat your question again, sir?

Yes. In accordance with the GatiShakti National Master Plan...

Sir, sorry to interrupt. May we request you to use your handset, please? Your voice is muffled, sir. Hello?

Am I audible?

Yes, sir. Mr. [ Pawar ], can you hear us?

Yes, sir. Am I audible?

Yes, sir. Please go ahead.

Yes, sir. According to GatiShakti National Master Plan, we are pleased to be a significant player. So may I know the competitive advantages that a company is having?

Yes. In the GatiShakti Plan, government is putting pressure. Government is putting all the focus on the infrastructure for these products. And we are there to serve from Northern region, we are there to serve from Western region. So we have one competitive advantage. Basically, in all the new coming trains, when they buy a train 160 kilometers, these bullet trains 348 kilometers, so we are going for the higher speed section where fabrication is quite difficult. We can surpass those difficulties, and now we are the one of the premium companies who can make these technical and critical budgets for the railways, for NHAI. So I think we are better placed for this GatiShakti plan.

Our next question is from the line of [ Vivek Kutam from GS Investment ].

Yes. Am I audible?

Yes, sir. Please go ahead.

Sir, our company got listed in '90s and was sleeping for a very long time. A good part is that unlike so many companies which came with IPOs in '90s and disappeared, our company is still there. And what has been the recent trigger change for which the company performance started improving? Is it the next generation is coming in? And you have been always very, very highly educated from IIT and ISM, promoter quality. And -- but what changed -- what have been the triggers that played wherein the company's performance has started improving? And the major concern is on the commodity business of GI pipes. So basically, how long will it take to move from that low value to high value? And if you can also tell about the opportunity size for us in different segments, what is the growth of rate we expect in time to come.

Sir, I must tell you, quickly identify we were growing, all the time investing. Right from 2005 to 2018, we kept on investing. And the time have come of the [indiscernible], I should say. And now the products have come of age. Indian policy has changed, Indian environment of business has changed. And we are trying to avail the opportunity and ramping our production capacity, and that is the only trigger. We are -- our policy has been incrementally low investment, high income. In what we are doing, all the production facilities are being streamlined to have a better production. That is why you see for the last 3 years, we have been growing at average rate of 20%. And we expect to continue to grow at that rate. We are not in a hurry to grow at 100% and consolidate our achievements and march forward. That is the only reason.

And can you tell something about the next generation, sir? Who is now taking interest in the business?

They are not only taking interest, they are in charge of the business. They are all in charge of the business, doing their work. Old men are only watching them.

Very good. Your promoter quality as far as the education part goes is almost second to none in India. And I'm not really sure that people might be aware about your background. And sir, what is the opportunity size and the growth rate which we expect? And the commodity business, that is a major concern of GI pipe. And how long will it take we can move to high value-added segment? When will the CapEx get completed, sir?

Sir, I must say that is the advantage here. For raw materials commodity, our products are engineering. Commodity, we take advantage, being our [indiscernible] commodity. And our products are not a commodity. We add value to it. Our each product made is specific to the customer requirement. That is the only advantage we have.

Our next question is from the line of Manan Shah from Moneybee Investment Advisor.

Congratulations on a good set of numbers. Sir, the 20% growth that we witnessed this quarter, so which segment contributed to this growth, if you can highlight a little bit on that part?

Contributed segment is giving a boost to our -- this 20% development. However, the other segments have also contributed. But significantly, if you want to know, it is the auto tubes section, which has given the boost.

Okay. And now with this volume that we did in the past quarter, I believe we would be at optimum utilization across all segments. So are we confident of maintaining this volume? And is there any possibility of any debottlenecking whereby we can achieve higher volumes in the upcoming quarters?

I can tell you, debottlenecking is an ongoing process. Continuous process, it is happening. And this is what we are doing, and the growth will continue with least of investment. Improving the balancing equipment is our core. By -- like that I give you an example, in metallics in the Gujarat plant, we have made investment around INR 20 crores. But it will add value of almost INR 300 crores annually to us. It will improve exports. Declining exports of the country, it will give a boost to our -- in exports. This is what we are doing in every plant. In debottlenecking, everywhere continuous exercise. This is what our research -- R&D department keeps on working.

Right. Secondly, on the forging side, in the earlier comment, you mentioned that we make around 12% to 13% margins in the forging segment. Now when I compare with other listed forging players like MM Forgings or RK Forgings, it seems we are on the lower side of the range in terms of margins. So I mean, is there any differential that we do? Is it the product because of which our margins are only 12%, 13% and not upwards of 15% to 18% sort of margin?

I perfectly agree with you, our volumes are lower. Costs are higher. We are working out on it. The extra incentive on adding products of defense and aerospace will bridge the difference very soon. We will see it in coming years, the difference here, we will be better than this.

Sir, the incremental business that you are looking to add in the forging segment in the defense, so what sort of margins do those products enjoy?

Much better than what others are doing.

Okay. Understood. So what sort of CapEx are we looking at in this forging segment?

It is under planning right now. We will let you know. When the time comes when we will approach it, we will let you know. But the planning is on the table and we are working on it.

Sir, I asked because we announced in this press release that we are again looking to raise more funds. Because I believe a couple of months back only, we raised around INR 66 crores by issue of warrants, which I believe was for the forging segment. Now again we are looking to raise more funds. So just to get an idea of what sort of CapEx are we looking at and what sort of funding are we looking at.

INR 66 crores raised for expansion plan in auto tubes section and fresh issue of shares. Further investment in subsidiary, about INR 40 crores. Capital expenditure of new bottlenecking equipment, INR 14 crores. And repayment of some loans. If the company want to repay -- prepay the loan, so we will repay existing loans so that interest burdens may reduce.

Our next question is from the line of Harsh Mulchandani from Kriis PMS.

Congrats on great set of numbers. Wanted to understand, when do we see a significant contribution of the new segments, defense and aerospace, touching, say, 10%? Do we expect that to happen in next 2 to 3 years? Or it will take even longer time frame to reach that number?

It should happen within the next 4 years, not 3 years.

Okay, okay. Got it. And another question, which I had was around if you could provide a segment-wise split as to -- I know you were asked in the previous question also of volumes. So I understand that auto, et cetera, is doing well for us. But going forward, this segment would then pick up and drive for us along with defense, et cetera, would also be a growth driver. But just wanted to understand that you also have the value-added products, which are kicking in across. So how do you see the volume pickup also happening along with this expansion of value in terms of EBITDA?

There are other sectors as well, which are doing well. One is the infra sector because India is booming for infrastructure. And that's one sector we will like -- we are expanding. And in coming 2, 3 years, you will see a good portion of our turnover comes from that and a good portion of margin comes from that, along with [ 2 things ] you have already mentioned. And the fourth one is the solar segment, which we have just started a year back. It will add to the bottom line. It will add to the top line. So these 4 sectors, auto tubes, our forgings, our infrastructure and solar, these 4 sectors will drive the company in the future.

[Operator Instructions] Our next question is a follow-up question from [ Mr. Aditya Jhawar from AG Capital ].

Sir, you said on the working capital, it's 40 days, right? How are you calculating working capital because when I math, with my number I did not get that.

Sir, you kindly send us your query over e-mail. We will provide detailed working on it.

[Operator Instructions] Our next question is from the line of [ Piyush Agarwal from SOIC LLP ].

So I just had a follow-up question. If we can have the volume-wise makeup of each and every segment in our [ CBD ] and also our CapEx, also capacity expansion by application, where all we are spending that. Because we have 4 to 5 units, so for investors sometimes it becomes extremely difficult to take where the capacity expansion is going away, the capital is allocated or which segment is going. So just a suggestion from my side.

Sir, can you speak a little slower? Please repeat your query.

Right, right. So sir, it was just a suggestion from my side. See, in the presentation that we see how the volume breakup of each every segment and also the capacity expansion plan for each and every segment, so that we, investors, can get a better idea to judge your company.

Sure, sure. With regards to the PPT, we have just the details you are seeking for. Those details are available there. Our secretary will send you.

[Operator Instructions] Next question is from the line of [ Apur Singh from Panchantra Investors ].

Congrats on the numbers. Just wanted to understand some visibility on the defense side, order book visibility, given the CapEx we're doing. So it will be really helpful to understand what are we looking in the future there?

We are already supplying for the last 2 years for protos in [indiscernible] system and the protos have been approved. Production orders are expected anytime. Now we are embarking upon in aerospace and defense subsidiary, we'll be making components for defense for we, there, think to be a very big export market. [indiscernible] a very big export market. And this project is being lined up, is on the [ blueprint ], drawing board. And the implementation should take place in 1.5 years. The visibility is very bright. Future is very bright. We are expecting the plan could be a game changer for the company's growth trajectory.

[Operator Instructions] Our next question is from the line of [ Nilwan Laha ], an investor.

I just wanted to understand your H1 sales volumes, please. And if you can call out the volumes in the forging segment and the precision segment separately for H1 and for the same period last year.

See, current 6 months, we achieved 1,86,000 metric tons -- sorry -- 1,83,000 metric tons volumes. So detailed working, we will provide you. You kindly send us e-mail. Segment-wise...

Sure, sir. What was the same number for last year, H1 again from...

Both the information, we will provide you.

Okay. All right. And my second question is, if I look at your cash flow from operations and compare it to your EBITDA over the last many years, the ratio is actually quite low, something like 40%. And this is consistently being the trend. So this means that free cash flow generation has been quite low because we have consistently invested a lot in fixed assets. So what is the plan to improve this? Because I can see the receivables and inventories have consistently eaten into your cash flow from operations. So is there a focused effort to improve this because it can then improve your debt-to-equity ratios and even prevent future capital raises.

Yes, yes, yes. Sir, we're always endeavored to improve the cash flow. And we are raising the funds to repay the existing loans also in order to improve our ratio. So this is a continuous process, and we are doing our effort to make the profit maximization.

Sir, actually, raising capital to pay out debt will not improve your operating cash flow. So I'm trying to...

Operating cash -- sorry, you please continue.

No, sir. That was my question. That operating cash flow, are you seeing or do you have any target of improving that so that we become a positive free cash flow company? Because for the last 2 years, 3 years, we have not been able to generate free cash flow. So is there a focused effort towards improving operating cash flow.

Yes. Yes, sir. In fact, our management told you that EBITDA margin next 2, 3 years would increase to 9.5% as against 8.40% currently. So definitely, operation margins will improve, and it will improve the cash flow.

Our next question is from the line of Gunjan Kabra from Niveshaay.

Congrats on a good set of numbers.

Sorry to interrupt. Ms. Kabra, may we request you to use hour handset, please. Your voice is muffled, ma'am.

Is this fine now?

Yes, ma'am. Please go ahead.

Yes. Sir, I wanted to understand -- sorry I joined the call a little late, if you have answered. Wanted to know if the export revenue in FY '22 was much higher. In FY '23, there was a slowdown in the demand. So right now, how are we seeing the export market particularly for that forging business? And what's the kind of order book like? As on, I guess, 2023, we closed the order book of INR 900 crores. So what's the kind of order book that we expect right now? And what kind of visibility we have for 5, 6 months?

We have almost 25 years of exports performance with us. As on date last year, we achieved nearly INR 1,000 crores. Here before also, we achieved INR 1,000 crores exports. And this year also, we are likely to achieve in spite of the headwind in the export market, in the network slowing. We are adding capacities -- incremental capacity to improve and have an edge in the export market. And we expect to clock INR 900 crores, INR 1,000 crores this year also.

The INR 900,000 crores in FY '24 also [indiscernible] export market.

Look, despite of Indian exports going down, the world demand is going down, we'll maintain our share of exports because our quality, commitment and consistency of export. This is our advantage over others.

Okay. And sir, what's the kind of order book that we have right now?

Almost 2 months.

Is it possible to say the number or...

For exports. Pardon me?

Not for exports. Generally, for the overall business, I'm trying to understand what the order that we have right now.

Basically, for all the -- we have 5 verticals and every vertical has a different order book. So if you take for the general product, it is 3, 3.5 months. But for the infrastructure product like forging like bullet trains, there is a visibility of 9 months to 12 months.

Thank you. Ladies and gentlemen, that was the last question of our question-and-answer session. As there are no further questions, I would now like to hand the conference over to Mr. Ram Agarwal, CEO of Goodluck India Limited, for closing comments.

I thank you, everybody, to join this con call. And in my closing comments, I would like to put some light on what we are doing in defense and aerospace because everybody wanted to know what we are doing. Basically, we have been [ going ] in defense and aerospace for the last 4, 5 years, but it all was on a quota basis. But now with the results, what we have seen in the last 4, 5 years and with the Indian government giving impetus on made in India for all the products. Normally, if you go 2 years back, there were almost 100 million import to India. But our government has put a target of at least 30% made in India. So with this impetus, we have started getting many inquiries. We have started getting many orders. And we thought it is the right time with our [ right ] experience and with our plant and machinery, then we thought to put -- to scale our -- this defense and aerospace business. And for this, we have already -- we are already going to be INR 40 crores in the coming fundraising. So this product will give a turnover of almost INR 300 crores, INR 400 crores additionally after 3, 4 years. It will take time. But it will give -- with a very good margin, it will give us a very good top line. It will give a very good EBITDA margin. So we all pray that we get this. And the strategy remains for Goodluck, we will try to put -- like in solar, we have said, we have not put up any new plant, but we have used our old plant and we transformed it to make this solar [indiscernible]. So it has given us the advantage by putting no more money, we have got good bottom line. So we will be trying this on all products and we go forward. With your support, we hope that we will have the new highs.

Sir, I would like to emphasize the policy of Goodluck is no volume without value and no value without volumes. That is our tagline of any development decision we take in Goodluck.

Thanks, everybody.

Thank you.

Thank you. Ladies and gentlemen, on behalf of Goodluck India Limited, that concludes today's session. Thank you for your participation. You may now disconnect your lines.