Buy Good Luck Steel Tube; target Rs 24: Firstcall Research

Firstcall Research has come out with its report on Good Luck Steel Tube and has recommended buy rating on the stock with a target of Rs 24 in its December 15, 2012 research report.

“Good Luck Group 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.”

“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, reported its financial results for the quarter ended 30 Sept, 2012. The company’s net profit jumps to Rs.70.76 million against Rs.62.71 million in the corresponding quarter ending of previous year, an increase of 12.84%. Revenue for the quarter rose 38.80% to Rs.2316.24 million from Rs.1668.81 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.3.78 a share during the quarter, registering 12.84% increase over previous year period. Profit before interest, depreciation and tax is Rs.207.05 millions as against Rs.136.65 millions in the corresponding period of the previous year.”

“At the current market price of Rs.20.80, the stock P/E ratio is at 1.52 x FY13E and 1.52 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.13.69 and Rs.16.64 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 21% and 24% over 2011 to 2014E respectively.  On the basis of EV/EBITDA, the stock trades at 4.06 x for FY13E and 3.55 x for FY14E.  Price to Book Value of the stock is expected to be at 0.32 x and 0.25 x respectively for FY13E and FY14E.  We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend buy in this particular scrip with a target price of Rs.24 for medium to long term investment,” says Firstcall Research report.

Public holding more than 90% in Indian cos

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