Weve done it before and we can do it now. See the positive possibilities.Redirect the substantial energy and turn it into positive
Dear Fellow Shareholders
Although I was good in studies in my initial years my parents and seniors guided methat SSE (Senior Secondary examination) is the most important examination. It was likelaying a strong Foundation. Today after 55 years I am still following & telling thesame to my third generation who is active and aggressive than me.
Slow Sustainable and Consistent (SSC) is the new mantra of our industry and wemust learn to play business cycles as always. We must have a strategy to remain in thebusiness for a long and be profitable always. Although we are CAUTIOUSLYOPTIMISTIC the team Goodluck firmly believes that we will able to increase RoE andRoCE in the coming years for all of us.
We were originally named as Good Luck Steel Tubes Ltd. to capture our diversifiedproduct profile we renamed ourselves as Goodluck India Limited and that is what we aretoday. Our new name which is contemporary to the current market place and practices butanchored on our founding principles values and belief we share as a group. We are ascommitted as ever to deliver the best possible quality products. Our focus on thrustsectors has created a strong foundation for future. The company has made a strategic shiftto move from regular low margins products to value added high margin products for higherrealisations. Our unique business model of continuous reshuffling of products and marketkeep us ahead. Our revenue contribution from value added product has been increased to 53%in FY16 as compared to 39% in FY12. We are targeting to generate 75% of revenue from valueadded product by FY19-20. To achieve this we have identified four key sectors namely AutoTube Railway Power and Infrastructure which will add to our growth going forward. Inline with this strategy we have also entered new sectors such as Solar Railway heavystructure. Special products developed were Engg products which helped the Company toclimb up in the value chain.
In view of the sluggish global demand the Company repositioned some of its supplies tofavorable markets. Company has performed excellently under the very-very challengingcircumstances. Volatility of steel prices and subsequent government intervention in theform of increased custom duty safeguard duty MIP created lot of business uncertainty.Weve done it before and we can do it now. See the positive possibilities. Redirectthe substantial energy and turn it into positive effective unstoppable determination.
In 2016 the Gross Revenues from Operation were Rs. 1084 crore as against Rs. 1170crore in last year. Sales value reduced marginally due to drop in raw material prices andsome deferment of some customer schedules.
We have made a profit after tax of Rs 33 cr. vs Rs 27 cr. last year. EBITDA marginsimproved from 7.8% to 10.2%. Last year the prices of our main raw material steel werevolatile. Towards the end of the financial year 2015-2016 the global steel pricerecovered mainly due to the thrust on stimulus and physical market tightness in China. Theprices in other regions are witnessing lesser volatility due to broad-basing of traderemedial measure. I believe there will be a small uptrend in raw material prices in FY17.Company has lay a strong foundation and done already substantial CAPEX in last three yearsin value added products like auto tubes structures and revamping of forging division. Atthis point we are done with our CAPEX cycle and want to concentrate CONSOLIDATINGcapacities and improving bottom line. The government has started investments in theeconomy by Rs. 4-5 lakh crores investment in Infrastructure sector. The same is going togive a boost to the infrastructure sector which will benefit the company in the structuredivision which we have recently augmented the capacities. Currently the capacity of thisstructure division has reached at 48000 from the previous of 24000 MT per annum. Weexpect the new structure plant to boost revenue by at least 10% this year. The Newcapacity will cater to railways solar support structures and heavy structures like steelbridges and girders. Last year Our railway products are well accepted and we are confidentto win big orders in current year. In tower we have supplied to every potential buyer inthe sector. Our marketing team is trying hard to reach the interior of the country toapproach every next vendor for Solar Cell. The results for the same are expected toincrease the penetration and demand from new and existing buyers. Solar is a long termbusiness and cannot be viewed by traditional approach of
Quarterly results. Good Luck with RDSO an organization of ministry of railways isapproved of making a steel position girder and is having a strong order book and repeatedorders. The more than normal monsoon will also boost the domestic demand. We have beendeveloping new customized products for a number of new customers. We will give productacceptance and order confirmation notices to the stock exchanges in the coming year. Ourutilisation of engineering capacity will increase by 20% this year due to somemodernization is underway. I am very sure we have a very good time ahead of us and normal15-20% growth. These figures can give us even more increase in both bottom line and topline. Moreover we have done some modifications in our plant so our raw materialconsumption will be less. It will also increase our bottom line.
I thank our valued customers stakeholders suppliers business associatesshareholders and above all my colleagues in Goodluck for their continuous support.Whatever may be the industry scenario we are always guided by our core values of HardWork Integrity Teamwork and Social Commitment. Our dedication towards fulfilling socialresponsibilities also helps us move towards a sustainable future. On behalf of the boardof directors and the employees thank you for your continued support.
M C Garg