Steel Stock Gets 52% Bullish Target From BOB Capital; Do you hold it?

Synopsis:- BOB Capital sees 51% upside with a target of ₹1,788 from ₹1,187. Capacity expanded to 500,000 tonnes, while industry demand grew 5–6% CAGR. OPM improved to 10% by Dec 2025. Defence and hydraulic segments are scaling up, with utilisation targeted at 65–70% by September 2026.

India’s iron and steel products sector continues to expand rapidly, with crude steel output reaching about 138–140 million tonnes in the first ten months of FY 2025–26, reflecting near‑double‑digit growth year‑on‑year. Steel demand is projected to grow around 8% in FY 2026, driven by strong building, infrastructure, and manufacturing activity, underpinning the sector’s central role in the country’s industrial growth.

With a market capitalization of Rs 3,945.24 crore, the shares of Goodluck India Ltd were trading at Rs 1,186.95 per share, decreasing around 0.68 percent as compared to the previous closing price of Rs 1,195.10 apiece.

BOB Capital Markets has issued a ‘Buy’ recommendation on the steel stock, setting a target price of  Rs 1,788. From the current level of  Rs 1,187.70, this suggests a potential upside of around 51%. The bullish outlook reflects confidence in the company’s growth prospects, capacity expansion, and improving industry demand trends.

Rationale

As per the brokerage, domestic steel pipes and tubes demand has grown at a steady 5–6% CAGR between FY19 and FY25. Backed by this trend, Goodluck has expanded capacity from 364,000 tonnes in FY23 to 500,000 tonnes in FY25, positioning itself to capture higher volumes and improve scale efficiencies.

The company also benefits from a well-diversified product mix serving high-growth sectors such as automobiles, infrastructure, railways, solar, and defence. Its strong clientele includes marquee institutions like Indian Railways, DRDO, ISRO, and HAL, providing revenue visibility and enhancing credibility across strategic and industrial segments.

Looking ahead, growth capex is expected to drive incremental gains over FY27–FY29. The hydraulic tube plant is currently operating at 50% utilisation, targeted to reach 65–70% by September 2026. Additionally, the defence subsidiary is projected to scale up significantly, with estimated revenue of  Rs 9,000 million by FY28.

The company reported a solid Q3FY26 performance, with revenue rising 10% from  Rs 942 crore to  Rs 1,037 crore, reflecting strong business momentum. Net profit increased 7% from  Rs 41 crore to  Rs 44 crore. However, profit growth lagged revenue growth, suggesting slight margin pressure despite overall steady financial improvement.

From Dec 2024 to Dec 2025, operating profit improved from  Rs 80 crore to  Rs 101 crore, reflecting steady earnings expansion. Operating Profit Margin (OPM) also strengthened from 9% in Dec 2024 to 10% in Dec 2025. Despite some quarterly fluctuations during the year, margins remained healthy, indicating better cost control and improved operational efficiency overall.

Goodluck India Ltd is a diversified engineering company engaged in manufacturing steel products for infrastructure, automotive, defence, and energy sectors. The company produces ERW pipes, precision tubes, forgings, and structures. With a strong domestic and export presence, it focuses on value-added products, capacity expansion, and serving high-growth industrial segments.

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