Shares of Tube Investments of India hit a new 52-week high of ₹2,057.8 on the NSE in Thursday’s trade.
The stock rose for four consecutive trading sessions. In the last 10 trading sessions, the stock is up by 30%. It is currently trading 82.70% higher than its 52-week low of ₹1,081. The stock price went from ₹1,550 to ₹1,975 in the last one month, delivering a return of 27.14 per cent on the strong business outlook.
Tube Investments of India Limited is a Murugappa Group company that specialises in engineering, bicycles, metal-formed products, and chains.
The stock has been witnessing remarkable traction for the last one year. The stock has climbed from ₹1,103 to ₹1,975, generating a return of over 80 per cent.
Furthermore, the stock gained more than 11.39% in the last six months, in contrast to the movement in the Nifty50 index, which has declined by nearly 9.29% in the same period.
The company has delivered a robust performance over the last several quarters, despite a steep rise in raw material prices. In Q4 2022, Tube Investments reported a 25 per cent increase in its revenue at ₹3,415 crore as against ₹2,733 crore in the January-March quarter a year ago.
For the year ending March 31, 2022, standalone PAT surged to ₹475.17 crore from ₹273.18 crore registered a year ago. Total income for the year ending March 31, 2022, rose to ₹6,432.91 crore from ₹4,302.28 crore registered a year ago.
Geojit Financial Services in a note dated 27 June said, "We expect TII's diversified approach to de-risk from the auto sector and concentrate more on other industrial segments like railways and power through an inorganic form to support long-term revenue visibility." Additionally, the government’s PLI scheme and China's plus strategy by major international OEMs to bring incremental growth for the medium term. In addition, the respite in commodity prices and the gradual recovery in the 2W space will bring some comfort in valuation. "
Revenue increased by 25% year on year in Q4FY22. This was largely driven by double-digit growth from the export market and CG power and industrials. The revenue mix consists of 65% volume and 35% from RM Inflation. The company reiterated that the export share in the engineering business (larger pie) is currently 20% and likely to grow to 30% in 2-3 years, and for the industrial business, 40% comes from export, targeting an overall 30% share in the export business in the medium term, it said.
Meanwhile, the company has a payout ratio of 24.14%, which means the company is retaining 75.86% of its earnings for reinvestment, and it had a return on equity ratio of 26%.
An average of 05 analysts polled by MintGenie have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.