Tube Investments of India Ltd: Value Pick Stock December 2019, Update
Update
Q1 FY23 Earnings
Tube Investments of India Limited (a Murugappa Group company) – specializes in engineering, bicycles, metal formed products, and chains has announced its Q1 FY23 numbers today.
The Company’s consolidated Revenue for the quarter was INR 3,799 Cr as against INR 2,437 Cr in the corresponding quarter of the previous year, registering a growth of 55.89 percent Y-O-Y basis.
Segment-Wise Revenue
- Engineering: The Revenue for the quarter was at INR 1,244 Cr as compared to INR 815 Cr in the corresponding quarter of the previous year. PBIT for the quarter was INR 118 Cr as against INR 83 Cr in the corresponding quarter of the previous year.
- Metal Formed Products: The Revenue for the quarter was at INR 335 Cr as compared to INR 245 Cr in the corresponding quarter of the previous year. PBIT for the quarter was INR 38 Cr as against INR 26 Cr in the corresponding quarter of the previous year.
- Mobility: The Mobility division has registered revenue of INR 246 Cr during the quarter compared with INR 172 Cr in the corresponding quarter of the previous year. PBIT for the quarter was INR 9 Cr as compared to INR 7 Cr in the corresponding quarter of the previous year.
- Others: The Revenue for the quarter was at INR 223 Cr as compared to INR 88 Cr in the corresponding quarter of the previous year. PBIT for the quarter was INR 17 Cr as against INR 10 Cr in the corresponding quarter of the previous year.
Must Read: Nifty Prediction for August 2022
Total Expenses of the company stood at INR 3481 Cr as compared to INR 2270 Cr for a period one year ago, increased by 53.34 percent.
The Profit (before share of profit of an Associate/Joint Venture, Exceptional Items and Tax) for the quarter was at INR 342 Cr as against INR 192 Cr in the corresponding quarter of the previous year, registering a growth of 78 percent Y-O-Y basis.
Subsidiary Company’s Performance
- CG Power and Industrial Solutions Ltd, in which the Company holds 58.05% stake, registered consolidated revenue of INR 1,665 Cr during the quarter as against INR 1,050 Cr in the corresponding quarter of the previous year. PBT (before exceptional items) for the quarter was at INR 172 Cr as against INR 71 Cr in the corresponding quarter of previous year.
- Shanthi Gears Ltd, in which the Company holds 70.47% stake, registered revenue of INR 99 Cr during the quarter as against INR 67 Cr in the corresponding quarter of the previous year. PBT for the quarter was at INR 18 Cr as against INR 12 Cr in the corresponding quarter of previous year.
Chairman’s Speech –
Commenting on the financial results, Mr. M.A.M Arunachalam said, despite the continuing challenges in supply chain constraints, fuel and commodity prices, the Company has witnessed steady performance during the quarter.
Growth was higher in the domestic market in Engineering, Metal Formed Products and Industrial chains division. Previous year was also affected partially due to Covid. The Company is also making steady progress on the launch of its EV three-wheeler and tractor products.
The performance of our subsidiaries CG Power and Industrial Solutions Ltd and Shanthi Gears Ltd has been very encouraging delivering strong growth and profitability across all segments.
Daily Chart –
On the National Stock Exchange, tube investment share closed at INR 2079.90 (UP 2.81%) with a volume of 9,13,111 shares.
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Final Comment: The Company has posted solid set of numbers despite challenging times, viz-a-viz maintaining high ROE and ROCE ratios. Considering growth and future prospects of the company, Finblab maintains a positive view on the company.
Also Read: A list of Q1 Results for the week
6 December 2019
Tube Investments of India Limited (established as TI Cycles of India Limited, Chennai) is a reputed Murugappa Group Company that specializes in engineering, bicycles, metal formed products, and chains.
Tube Investments of India: History
In 1959, Tube Investments of India (TII) was formed by merging the TI Cycles of India and Tube Products of India.
Read Details on tube investments demerger
The Company viz., Tube Investments of India Limited was incorporated on October 6, 2008, under the Companies Act, 1956 in the State of Tamil Nadu as a wholly-owned subsidiary of the erstwhile un-demerged Tube Investments of India Limited, a public limited company incorporated under the Indian Companies Act, 1913 on 9th September, 1949.
Tube Investments of India: Business
Engineering
- Tube Products of India was set up in 1955, in association with Tube Products Limited (UK), as a measure of backward integration with the bicycle plant.
- TPI is the most favoured supplier of Cold Drawn Welded (CDW), Electric Resistance Welded (ERW), and precision tubes to major automotive companies in India and overseas. TPI is India’s definite market leader in CDW tubes for the automotive industry.
- It also has a significant market presence in power plants, boiler, textile machinery, general engineering. It is the Market leader in Cylinder bore tubes and Telescopic Front Fork Inner tubes for shock absorber and gas spring applications, Propeller shaft tubes for automotive segment.
- Other well-known products include Drag links, Heavy thick steering shafts, and Rear Axle Tubes, Side Impact Beams, Tie Rods, and Hydraulic Cylinder tubes.
Cycles & Components
- A pioneer in the Cycles market, TI Cycles, formed in 1949, has constantly come up with new trends in line with evolving consumer needs.
- The company has been proactive and was the first Bicycle Company to change the cycle retail landscape, both in urban and rural areas.
- The Company has a premium shop for all Hercules Cycles, BSA Cycles & Montra products and has a customer-friendly ambiance that serves as a model for other bicycle outlets in the country.
- TI Cycles has plants at Nasik, Chennai, & Noida, and Warehouses at Cuttack, Durgapur, Guwahati, Patna, and regional offices, through which it serves it nationwide 2500 plus dealer network.
Metal Formed Products
- Established in 1965, TI Metal Forming is a leader in precision value-added sheet metal formed components.
- TIMF manufactures car door frames, hydro-formed parts, impact beams, window and guide channels, frames for various types of motor casings etc., For Railways, TIMF manufactures and supplies roll-formed sections for wagons and coaches apart from sub-assemblies of sidewalls, end-walls, and roof.
- TIMF has manufacturing locations at Chennai (Kakkalur and Thiruninravur), Bawal, Uttarkhand, Halol, Sanand, and Pune. The plants are strategically positioned close to OEM customers to enable timely deliveries.
Key Notes from the Company’s Last Con-Call
- The company aims to achieve revenue growth at 15 to 17 percent, which implies revenue of INR 100 billion over the next 4 years.
- Over the years, TI had invested around INR 10 billion to nurture financial services business and INR 5 billion to acquire Shanti Gears, increasing its debt level to around INR 13 billion.
- The management unlocked value from TI’s general insurance business by selling a 14% stake of its 74% holding in the business to its JV partner, Mitsui Sumitomo, for INR 9 billion; the proceeds (INR 6 to 7 billion) were used to pay down debt.
Quarterly Numbers
The Company has reported its standalone quarterly numbers on November 1, 2019;
- Net Sales of the company stood at INR 1,112.72 Cr in September 2019 down 18.76 percent from INR 1,369.67 Cr in September 2018.
- Quarterly Net Profit at INR 90.27 Cr in September 2019 up 57.93 percent from INR 57.16 Cr in September 2018.
- Tube Investment EPS has increased to INR 4.81 in September 2019 from INR 3.06 in September 2018.
Listed On
The shares of Tube Investments of India Limited are presently listed at Bombay Stock Exchange (BSE); CODE 540762 and National Stock Exchange (NSE) as TIINDIA
Stock Info: Tube Investments of India
Share Holding Pattern
Financials: Tube Investments of India
Conclusion
Tube Investments of India Ltd – a Murugappa Group Company that specializes in engineering, bicycles, and metal formed products.
Promoters of the company are having more than 47 percent stake (stake increases since the last 2 quarters) with almost 0 percent pledge shares.
Along with this, some of the top institutions like Toyota Tsusho Corporation, L&T MUTUAL FUND, HDFC TRUSTEE COMPANY LTD, FIRST STATE INVESTMENTS ICVC, Sbi Focused Equity Fund, Reliance Capital Trustee Co Ltd, DSP SMALL CAP FUND, and THE WELLINGTON TRUST COMPANY is having more than 1 percent stake in the company.
On the technical front, tube investments share is trading well above its 50 EMA (426) and 200 EMA (379) on the daily chart.
Keeping the above-listed factors in mind, Tube Investments of India looks good at INR 470. Finblab recommends investing in the stock in a staggered manner for medium to long term.
Value Pick Stock: November 2019
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