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Tube Investments Posts Blockbuster Results, Profit up by 134%: Result Analysis


Tube Investments is an auto ancillary company, which is into motor frame, chains and precision tube manufacturing along with cycle and accessories manufacturing. The firm has posted a block buster results for the first quarter of the year. The profits are up to 2.35 times the June 2015 numbers with only 6.48% growth in revenue.

Key Takeaways :

  • Income up to 1145 cr. (+6.48%) and profit before tax is at 88 cr. (versus 62 cr. , +42%).
  • They paid much higher tax last year (about 50%, don’t know why) so PAT is up big. At 64 cr. versus 27 cr. it’s +135%.
  • EPS at 2.26 for the quarter.
  • Increase in operating margin from 5.54% in Q1FY16 to 6.79% in Q1FY17. Not much though, but cost of material has gone down, but is compensated by higher other operating costs
  • The less noticeable other income increased from 2.03 Crs to 10.30 Crs. from the higher cash balances they have.
  • Finance costs reduced by 29.16% compared to Q1 last year. This is because they retired debt after getting a whopping 800 cr. from the sale of their stake in the Chola Insurance business.
  • Major revenue and profits came from Engineering (precision tubes) and metal products division (auto ancillaries). Both the division together accounted for 66.31% revenue but delivered 72.55% of the profit before tax and interest. Cycles and accessories division dragged down the net profit.

Note: For the quarter ending Mar-16, there was an exceptional item of Rs 820.78 Crs due to divestment in its subsidiary. (Chola Insurance)
Tube Investments Q1FY17 Result
Tube investment closed at Rs 558.05, up by 1.40% from previous close.
Tube Investments Q1FY17 Share Price Movement
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Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.


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