2,700% rally in 5 years! SBI Securities expects another 31% jump in THIS small-cap stock. Do you own?

Multibagger small-cap stock: Domestic brokerage firm SBI Securities projected robust growth for Goodluck India, a company specialising in the manufacturing and sale of engineering products, in its latest report.

The brokerage sees strong growth potential for the company, driven by its entry into the hydraulic tubes business, the successful establishment of a 50,000 metric tonnes per annum (MTPA) facility, and plans to double its capacity to 100,000 MTPA in the future.

Additionally, the brokerage highlighted the successful establishment of a high-margin defence business through its subsidiary for manufacturing artillery gun shells. It also noted the company's strong business relationships with marquee clients across both public and private sectors.

The brokerage expects EBITDA per tonne to expand as operations stabilise in the newly established hydraulic tubes and defence & aerospace businesses. Additionally, it believes the company is well-positioned to capitalise on the strong long-term demand for solar torque tubes.

Supported by these positive tailwinds, SBI Securities projects the company's revenue, EBITDA, and net profit to grow at a CAGR of 13.6%, 18.1%, and 25% between FY24-FY26E, reaching ₹4,550 crore, ₹394 crore, and ₹207 crore, respectively.

The brokerage has valued the business at a 15x P/E multiple based on its FY26E earnings, arriving at a target price of ₹947, projecting an upside potential of 31% from the stock's latest closing price. It assigned a 'buy' rating to the stock.

Shares delivered over 2,700% return in 5 years

The company's shares have delivered fabulous returns to their shareholders in the last five years, growing from ₹25.25 per share to the current trading value of ₹722, resulting in a phenomenal return of 2,760%.

In September last year, the shares crossed the ₹1,300 mark, touching an all-time high of ₹1,330. However, since then, they have witnessed profit booking amid a sharp correction in the broader market. 

Looking at the stock's recent yearly performance, it gained 553% in CY21 and 145% in CY23.

About the company

The company is among the leading manufacturers of a wide range of engineering structures, precision/auto tubes, forgings for defence & aerospace, CR products, and GI pipes. Established in 1986, the company has transformed itself from manufacturing regular steel products to a premier engineering solutions provider.

It has strategically shifted its focus on high-margin, value-added products and high-growth sectors such as auto, solar, railways, and defence & aerospace. Headquartered in Ghaziabad, the company has a manufacturing facility of 450,000 metric tonnes per annum (MTPA) situated in Sikandrabad (UP) and Kutch (Gujarat), India.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.