• The value of production for the quarter was up by 12% to Rs 280.01 crore even while the sales (excluding other operating income) was up by 10% to Rs 252.69 crore. Value of production is 10.8% higher than sales for the quarter compared to just 9.1% in corresponding previous period. This reflects build up in inventory. Other operating income was up by 3% to Rs 7.61 crore and thus the sales were up by 10% to Rs 260.30 crore.

• Operating profit margin expanded by 210 bps to 8.3% and that can be attributed to savings in all cost heads. Material cost as proportion to sales net of stocks was down by 110 bps to 76.6%. And that of staff cost and OE was lower by 10 bps (to 3.6%) and 70 bps (to 12.2%) respectively there by facilitating strong expansion in operating profit margin. The growth in the profit of the Company has come on the back of operation efficiency and shifting the focus to High Margin Products. Operating profits have been consistent due to optimal capacity utilisation, downtrend in raw material prices and right mix of products.

• Other income was up by 80% to Rs 0.69 crore. The interest cost was up by 20% to Rs 9.90 crore. The depreciation was higher by 69% to Rs 3.36 crore. Thus the PBT was up by 92% to Rs 9.16 crore.

• Taxation was down by 69% to Rs 0.64 crore with tax rate being lower at 6.9% compared to 38.3% in corresponding previous quarter. Thus the PAT was higher by 215% to Rs 8.53 crore. Prior Period Adjustment was a profit of Rs 0.02 crore compared to an expense of Rs 0.04 crore in corresponding previous period. Thus the net profit was up 220% to Rs 8.54 crore.

Yearly performance

Standalone sales were higher by 9% to Rs 1087.66 crore. But with operating margin expand by 70 bps the growth at operating profit was at Rs 83.32 crore, a rise of 19%. After accounting for higher other income, higher interest and higher depreciation the PBT was higher by 33% to Rs 37.37 crore. Taxation was lower by 18% to Rs 8.46 crore. The PAT was higher by 63% to Rs 28.90 crore.

Consolidated sales for the fiscal ended March 2015 stood at Rs 1102.53 crore with net profit (after PPA) stand at Rs 29.42 crore. The company has acquired 100% of voting rights in Masterji Mettaloys Private Limited converting it into a 100% wholly owned subsidiary w.e.f March 31, 2015.

Management Comment

Mahesh Chandra Garg, Chairperson commenting on results quoted, "The current quarter performance is encouraging and we expect to perform better with New Capacity, better product mix and New Product Launches in H2. Our expanded presence in International Market will be the demand drivers for our key sectors i.e. Auto, Infrastructure, Solar Energy and Engineering products. Dedication, Hardwork, discipline & research has always been our USP and will continue to be our road towards progress and prosperity. The team of dedicated and enthusiastic professionals of the Goodluck Steel family have taken it upon themselves to focus on building a strong bottom line which, I am sure will exceed the expectations of the dear shareholders who put faith in us over the years. Demand in India for our products for Infrastructure, Auto & Solar Energy is expected to rise due to positive Industrial Atmosphere." He further added, "Raw material prices is likely to be soften as per available international trend and expected to be come down by 3-5% on weighted averages basis in H1 FY16."

Other developments

During the year the expansion project for manufacturing of ERW & CDW tubes set up at A-59, Industrial Area-Sikandarabad, Dist Bulandshahar, UP has been commissioned.

The company has allotted only 1000000 convertible warrants at price of Rs 60 each on preferential basis to person belonging to promoter group which has been converted into equity shares on Feb 16, 2015 upon receiving the remaining payment of 75% amount of issue price.

The stock hovers around Rs 86.75.