Buy Goodluck Steel Tubes; target Rs 30: Sunidhi Securities

Sunidhi Securities is bullish on Goodluck Steel Tube (GSTL) and has recommended buy rating on the stock with a target price of Rs 30 in its October  25, 2012 research report.

"Goodluck Steel Tubes (GSTL) was incorporated in Nov.'86 as a private limited company. It became a deemed public company in Jul.'90 and was converted into a public limited company in 1994. In April '95, it came out with a public issue to part-finance the project to expand the capacity of 32,000 tpa to 50,000 tpa. During 1999-2000, GSTL set-up cold rolling strip plant. Currently, the pipe division at Sikandarabad industrial area (45 km from Delhi) with a capacity of 1- lakh tpa manufactures all kind of ERW black steel pipes. GSTL's business is divided into tubes & pipes (74%), engineering products (15%) and auto tubes (11%). Goodluck Group is one of India's leading and fastest growing business group with over 500 employees and having multi location plants and units.

Products: It offers a wide range of mild steel pipes & tubes for structural purposes, mechanical & mineral engineering, E.R.W. pipes for water, gas & sewerages, steel tubes for idlers for belt conveyors, steel tubes for water wells, steel tubes for furnitures, steel tubes for automobile purpose, screwed & socketed steel tubes & tubular, steel pipes & tubes for pressure purposes, carbon steel tubes screwing and mild & welded steel tubes for various other purposes. GTSL’s cold rolled and Galvanised sheets-coils division is engaged in manufacturing standard range of Galvanised Plain & Corrugated Sheets/ Coils for wide range of applications.

GSTL would be focusing on the optimum utilisation of the capacities, intensified marketing efforts to improve the top line, and controlling costs by using various tools and managing risks. Being in the industry for over two decades, GSTL is able to offer integrated solutions relating to products and services for various projects across industries. At the CMP of Rs 21, the share is trading at a P/E of 1.6x on FY13E and 1.2x on FY143E. We recommend BUY with a target price of Rs 30 in the medium term," says Sunidhi Securities research report.

Non-Institutions holding more than 90% in Indian cos

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