Good Luck Steel Tubes - Value buy

Company Profile : -

Goodluck Steel Tubes, an engineering conglomerate is a diversified engineering product manufacturing company, a steel processor not a steel manufacturer.  It is one of India's leading and fastest growing business groups with over 1000 employees and having multi location plants and units. With experience of more than two decades in the industries Goodluck has diversified business interests in the national and international markets. Established in the year 1986, Goodluck Steel Tubes Ltd is an ISO 9001:2008 certified organization, engaged in manufacturing and exporting of a wide range of galvanized sheets & coils, towers, hollow sections, CR coils CRCA and pipes & tubes. The company is also specialized in providing Telecommunication Structures, ERW Steel Tubes, ERW Steel Pipes, and Galvanized Black Steel Tubes. These are acclaimed for high tensile strength, long service life and higher efficiency. Leveraging on advanced manufacturing facilities and engineering expertise, we have been successfully catering to the needs of clients from Public sector, Private sector OEMs and Central & State Government Departments.

Why to Buy?

• Strong Product Portfolio -The company offers a broad portfolio of products designed in line with international standards & specifications. The ranges of products are known for quality, durability and superior finish. These products can also be customized to meet the specific application requirements of the clients. The wide range of products can be broadly classified as: 

1. Welded Tubes & Pipes - Hot Dip Galvanised Pipes - Black Pipes - Pre Galvanised Pipes - Casing and Screen Pipes 
2. Galvanised Tubes & Pipes - Galvanised Pipes - Pre Galvanised Pipes 
3. Cold Rolled Coils & Sheets 
4. Galvanised Coils & Sheets 
5. CRCA 
6. Hollow Sections - Square - Rectangular - Round Hollow Sections 
7. Galvanised Structures for Power & Telecom Projects - Transmission/ GRID Towers / Sub Station - Telecommunication Structure - Swaged Poles for Lighting.

• Strong Client Base -

• Resumption of growth after 12 quarters of flat sales and profit growth. 
• Rising dividend payout indicates better prospects for the company and the management seems willing to share growing cash flow with minority shareholders. 
• The Company plans to invest about Rs.200 crores in the next three years towards setting up a new forging facility and enhancing capacity of its structural division. The work on two Greenfield plants would start next year and both plants will commence production in 1-2 years time. This will grow the topline and margins for the company. 
• As per company’s expansion plan it has already identified four sectors like Railways, Auto, Energy and Defense for improving the margin profile. It has already started work on this.

The company is in expansion mode which will lead to increase in topline and bottomline in coming years. The company is in good shape to take the advantage of increasing spending from sectors like Auto, Railways and Defense. We believe 3 phase expansion plan will have significant impact on the company's performance over the next 2-3 years. Hence, we initiate our positive coverage on the company.