• Sales excluding other operational income were down by 9% to Rs 233.81 crore. But the value of production for the quarter was down by 7% to Rs 231.14 crore. Value of production is 1.14% lower than sales for the quarter. In comparison value of production in corresponding previous period was lower by 3.12% that the sales for that period. This reflects liquidation of earlier period stocks during the quarter. Other operating income was down by 60% to Rs 2.20 crore and thus the sales were down by 10% to Rs 236.02 crore.
• Operating profit margin expanded by 240 bps to 10% and that can be attributed to sharp fall in material cost (including cost of traded goods). Material cost as proportion to sales net of stocks was down by 750 bps to 67%. But the staff cost and OE was higher by 100 bps (to 4.8%) and 420 bps (to 18.1%) respectively. Lower metal prices, better product mix and optimal capacity utilization seems have facilitated the operating profit margin.
• Other income was down by 19% to Rs 0.25 crore. The interest cost was up by 7% to Rs 9.32 crore. The depreciation was higher by 169% to Rs 3.99 crore. Thus the PBT was up by 5% to Rs 10.46 crore.
• Taxation was up by 2% to Rs 2.65 crore but the tax rate was marginally lower at 25.3% compared to 26% in corresponding previous period. Thus the growth at PAT was 6% to Rs 7.81 crore.
• The pipe/sheet/structure segment registered 7% growth in segment profit to Rs 16.86 crore despite 6% fall in segment sales (to RS 203.11 crore). Growth in segment profit despite lower sales is largely due to 100 bps expansion in its segment margin to 8.3%. Similarly aided by 250 bps expansion in segment margin, the segment profit of engineering goods was higher by 4% (to Rs 2.67 crore) even while its sales was lower by sharp 29% (to Rs 32.91 crore).

Consolidated sales for the quarter ended December 2015 was Rs 235.64 crore and the net profit was Rs 7.05 crore.

Good luck has acquired 100% of the voting rights in Masterji Mettaloys (P) Ltd converting it into a 100% wholly Owned subsidiary wef 31st March 2015, therefore the previous period figures have not been reported Further, the Board in its meeting on 15th Sept 2015 approved the amalgamation of Masterji Metelloys with Good Luck Steel Tubes. The appointed date of the Scheme of amalgamation shall be April 1, 2015. The scheme of Amalgamation has been filed with H'ble High Court of Delhi for approval. As the approval of court is pending no effect of the scheme has been given.

.Nine month performance

Standalone sales were lower by 8% to Rs 760.24 crore. But with operating margin expand by 300 bps the growth at operating profit was at Rs 78.96 crore, a rise of 28%. After accounting for lower other income, higher interest and higher depreciation the PBT was higher by 38% to Rs 38.80 crore. Taxation was higher by 64% to Rs 12.30 crore and thus the PAT was higher by 28% to Rs 26.51 crore.

Management Comment & Outlook

Mahesh Chandra Garg, Chairman while commenting on the company's performance for 9MFY16 said, "We have delivered a decent result in a volatile and challenging commodity price environment. Our strong commitment towards shifting our portfolio to high value added products has clearly visible in our 9MFY16 performance with EBITDA margin improved by 38.5% to reach at 10.5% in 9MFY16. We are committed to create superior value for our shareholders by taking necessary actions with focus to improve our bottom line vs. top line."

The Company expects to complete its ongoing capex in its structure division in the current quarter and hopes to start operation by the end of March 2016. With RDSO (Research Design & Standards Organization), Ministry of Railway, approval and strong order book, we expect the structures division to boost revenues by atleast 10% while adding growth to EBITDA by 20-25%. The structures division order book is good at 9 months.

With solar power being the top priority of the Modi Government (100 GW by 2020) and repeat orders from marquee clients like the Tata group, NTPC, the Company expect the solar business would contribute to improving the overall margins of the company. The company is targeting to supply Solar Structure support for 200MW in next year.

Good Luck is continued to enhance its Engineering Value Products which mainly contribute Structure Support Solution, Auto Tubes and Forging. These segments go along with Government's thrust area. Government spending 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 favour of Good Luck growth plan.

The stock hovers around Rs 83.90.