Expect 15-20% topline growth in FY17: Goodluck Steel

Muted exports weighed on the turnover in the fourth quarter of FY16, said MC Garg, Chairman & Managing Director of Goodluck Steel Tubes.The company reported a flat net profit at Rs 7 crore for the fourth quarter and marginal growth in total income to Rs 236 crore from Rs 235.6 crore quarter-on-quarter. However, the operating profit for the company fell 6 percent to Rs 21.5 crore. Going forward, Garg expects the topline to grow 15-20 percent on back of added capacities. The company will be commissioning capital expenditure to revamp its forging and tube divisions in FY17.Below is the verbatim transcript of MC Garg’s interview with Surabhi Upadhyay & Nigel D'Souza on CNBC-TV18.Surabhi: Can you run us through how volumes have shaped up for you and what the break up has been between both the businesses in terms of actual growth in Q4?A: Volumes have grown by 7 to 8 percent in spite of difficult conditions. However, the revenue has gone down because of low commodities prices.Nigel: 7-8 percent on a year-on-year (Y-o-Y) basis?A: Yes.Nigel: Could you break up what exactly was the exports as well as your domestic business? What exactly is the current break up and going ahead what are you looking to maintain that at?A: Exports declined by almost 18 percent and these are muted export performances, which resulted in lower turnover.In spite of lower raw material prices we would have done better if exports were better. However, export demand was very low in the year.Nigel: Could you tell us out of the Rs 236 crore that you have reported how much was exports in percentage terms, 30 percent?A: Yes, almost.Surabhi: What is the outlook? You mentioned that despite volumes picking up because of lower prices it has been a sluggish quarter for you. Do you see that changing, how soon can we expect a pricing uptake?A: Year ahead I see lot of prospects because of our some capex commissioning in the structure division, ramping up the capacity in the auto tube division and revamping our forging division we are expecting a very good year ahead.Surabhi: When these fresh capacities come on stream what does it mean in terms of additional revenue, additional volumes, if you are not willing to talk about pricing?A: We expect 15-20 percent growth this year.Nigel: Margins?A: Margins will also equally improve to that extent.Surabhi: Can you tell us a little bit about your current debt to equity ratio, the debt levels right now and if there is any plan to change that?A: Total debt to equity ratio is improving. Our long-term debt is already about 0.7 percent ratio. However, total debt to equity is around 1.51 and in a year to come, we are expecting it to go down to 1.32.Nigel: Could you tell us what exactly is your current order book? You were talking about railways orders as well coming in there. Currently how much of that is railway’s orders and how much of that order book has export related orders?A: There are no export order in railways.Nigel: Out of the total order book how much of it is railways and also out of the total order book if you could breakup what exactly is domestic and how much is export orders?A: Exports are roughly for two months and balance is domestic, our order book is for almost three months but that too in a structure division we are booked for up to 8 months. Structure includes our railways, over bridges, solar support structure, heavy duties structure and telecom towers and transmission lines. We are very happily placed there.