The Board of Directors of Tube Investments of India Ltd. (TII), formerly known as TI Financial Holdings Ltd., approved the financial results for the quarter ended 30th June 2019.

Highlights:

• Revenue of Rs. 1,252 crores in the quarter with a drop of 8% over Q1 of last year mainly because of de-growth in auto industry (production of passenger vehicles and two-wheelers dropped by 12% and 10% respectively – ref SIAM data).
• Highest-ever PBT (before exceptional items) of Rs. 107 crores, a growth of 36% over Q1 of last year. This is excluding the gain of Rs. 19 crores (shown as exceptional item) made on tendering of shares held in Shanthi Gears under the buyback scheme. PBT after exceptional item is Rs. 126 crores.
• ROCE improved to 23% from 18% in Q1 of previous year (excl. exceptional item).
• Free cash flow to PAT (before exceptional items) at 120%

Standalone Results

TII’s revenue for the quarter was lower by 8% at Rs. 1,252 crores as against Rs. 1,357 crores in the corresponding quarter of the previous year. The profit after tax for the quarter was at Rs. 88 crores as against Rs. 54 crores in the corresponding quarter of the previous year. Higher profitability and lower capital employed enabled improvement in Return on average Capital Employed (ROCE) to 23% from 18% in the corresponding quarter in the previous year. The company generated free cash flow of Rs. 83 crores during Q1 and at 120% of PAT. During the quarter, the company surrendered 32.39 lakh equity shares under the buyback scheme announced by SGL and registered a profit of Rs. 19 crores. This was shown as exceptional item.

Review of Businesses

Engineering

The revenue for the quarter was at Rs. 657 crores compared with Rs. 717 crores in the corresponding quarter of the previous year. Profit before interest and tax for the quarter was Rs. 67 crores as against Rs. 65 crores in the corresponding quarter of the previous year, registering a growth of 3%. The ROCE of this division continues to be at 40% similar to the corresponding quarter of previous year.

Cycles and Accessories

This division has registered revenue drop of 23% during the quarter compared with corresponding quarter in the previous year, primarily due to lower institutional volumes and de-growth in trade market. However, several cost control measures enabled us to achieve a profit before interest and tax for the quarter of Rs. 12 crores as against Rs. 7 crores in the corresponding quarter of the previous year, registering a growth of 65%. The ROCE of this division improved to 22% as against 12% in the corresponding quarter of the previous year.

Metal Formed Products

The revenue for the quarter was at Rs. 350 crores compared with Rs. 312 crores in the corresponding quarter of the previous year, registering a growth of 12%. Profit before interest and tax for the quarter was Rs. 34 crores as against Rs. 26 crores in the corresponding quarter of the previous year. Growth achieved in segments like railways, industrial chains and fine blanking products compensated for the impact of de-growth in auto industry in Q1. The ROCE of this division improved to 29% as against 25% in the corresponding quarter of the previous year.

Consolidated Results

TII’s consolidated revenue for the quarter was Rs. 1,384 crores as against Rs. 1,479 crores in the corresponding quarter of the previous year. The profit after tax for the quarter was at Rs. 79 crores as against Rs. 62 crores in the corresponding quarter of the previous year.

Shanthi Gears Ltd., a subsidiary company in the gears business, in which the company holds 70.47% stake, registered revenue of Rs. 72 crores during the quarter as against Rs. 62 crores in the corresponding quarter of the previous year, registering a growth of 16%. Profit after tax for the quarter was at Rs. 9.5 crores as against Rs. 8.5 crores in the corresponding quarter of previous year.