For H1FY'16 Goodluck steel Tubes net sales fell 7% to Rs 524.22 crore compared to H1FY'15. Operating profit was up 33% to Rs. 55.45 crore while Net Profit after Tax increased 41% to Rs.18.7 crore.

Commenting on the company's performance for H1 FY16, Mr. Mahesh Chand Garg, Chairman said, "We have delivered first half performance as envisaged. Our singular focus is on moving away from commoditized products and concentrating on value added engineering products. The result of this shift is clearly visible in our H1 FY16 performance with EBITDA margin improved to 317 point to reach at 10.68% in H1 FY16 over 7.51% in Hl FY15."

Good Luck Group is an ISO 9001 certified organization, engaged in manufacturing and exporting of wide range of Automobile CDW Tubes, Forged Engineering Products, T&D Towers & Boiler Structure, Galvanized Pipes, Roofing Sheets & Annealed Sheets. Our Group is one of India's leading and fastest growing business groups with over 1800 employees and having plants and units at different locations. With all requisite facilities and domain expertise, Good Luck have the capacity to manufacture & process around 2,00,000 MT of various steel products. Years of research and careful Co-Ordination of methodology has resulted in qualitatively superior products meeting stringent customer norms, manufactured by cost effective production techniques.

Net sales in terms of value have been lowered by 9.3% to Rs. 514.36 crore in H1FY'16 from Rs. 563.56 crore in H1FY'15 which is attributed to decline in steel prices. However volume has remained flat during in same period.

On order book, the company continues to receive repeat orders from its existing customers. As highlight, During H1FY'16, structure division has got good booking for its Transmission and Distribution segment, which is a promising segment.

As per expansion plan, the company is doing capex of Rs 30 crore in its structure division and hope to start operation by March 2016. As per industry estimates, an investment of 1.25 lakh crore is expected in next 3-4 years in Power Transmission and Distribution and company is hopeful to get benefited from future expansion of the industry.

In addition to this, in sunrise sector such as solar energy has given good boost to the company. In solar domain, company got order to supply their solar structure for 55 MW project. The company is targeting to supply Solar Structure support for 200MW in next year.

Performance for the quarter ended September 2015

For quarter ended September 2015, the overall top-line fell 9% to Rs 249.65 crore compared to corresponding previous year period. Operating margins of the company rose 410 bps to 11.6% as cost of material consumed as a percentage of net sales (net of stock adjustment) fell 740 bps to 68% offset by 80 bps rise in employee benefit expenses to 4.2% while other expenses increased 270 bps to 16.4%. As a result operating profits increased 40% to Rs 28.99 crore.

Other income fell 14% to Rs 0.32 crore. Interest cost increased by 8% to Rs 9.68 crore. Depreciation rose 26% to Rs 3.71 crore. PBT rose 73% to Rs 15.92 crore. Considering 240 bps fall in effective tax rate to 30.5% net profit rose 60% to Rs 11.07 crore.

Segment Results

Pipe/Sheet/Structure: For the quarter ended September 2015, the sales of Pipe/Sheet/Structure division decreased 6% to Rs 207.18 crore representing 83% of total revenues of the company. PBIT increased 34% to Rs 19.88 crore compared to Q2FY'15. The capital employed increased 8% to Rs 426.22 crore representing 81% of total capital employed.

For H1FY'16 revenues fell 2% to Rs 445.19 crore representing 85% of total revenues while PBIT increased 34% to Rs 38.58 crore representing 80% of total PBIT.

Engineering Goods: Engineering Goods division contributed 17% to the company's total revenues in Q2FY'16 which fell 24% to Rs 42.46 crore. PBIT increased 82% to Rs 5.4 crore. The capital employed increased 12% to Rs 98.37 crore representing 19% of total capital employed.

For H1FY'16 revenues fell 28% to Rs 79.03 crore representing 15% of total revenues while PBIT increased 31% to Rs 9.52 crore representing 20% of total PBIT

Performance for half year ended September 2015

For half year ended September 2015, the overall top-line fell 7% to Rs 524.22 crore compared to corresponding previous year period. Operating margins of the company rose 320 bps to 10.6%. As a result operating profits grew 33% to Rs 55.45 crore. Other income fell 25% to Rs 0.58 crore. Interest cost increased by 9% to Rs 20.33 crore. Depreciation rose 32% to Rs 7.35 crore. PBT as a result rose 55% to Rs 28.35 crore. Considering 530 bps rise in effective tax rate to 34.1% PAT rose 41% to Rs 18.7 crore.

Outlook by the company: Goodluck has identified Auto, Energy and Railway for improving the margin profile. Furthermore, we expect that Government's thrust on Solar Energy, Railways and Infrastructure as well as "Make in India" and "Smart Cities" campaign and Auto Mission Plan 2016-26 will work in favor of Goodluck growth plan.

The scrip is currently trading at Rs 98