While most auto stocks have suffered in the last 1 year due to the impact of the COVID-19 pandemic, Tube Investments India has doubled investor money in this period.
The stock has risen 110 percent from ₹858 a year ago to ₹1,802 currently. In the last 3 years, it has jumped nearly 400 percent from around ₹350 in February 2019.
In comparison, the Nifty Auto index has added a little over 6 percent in the last 1 year and just 3 percent in the last 3 years.
Among peers, Tata Motors and Balkrishna Industries also performed well but below TI India. Tata Motors added 51 percent in the last 1 year while Balkrishna Industries rose 35 percent. Meanwhile, MRF, Hero Moto, Exide, Bajaj Auto, Eicher Motors all declined in double digits in the last 1 year.
Incorporated in 1949 as TI Cycles, Tube Investments of India Limited is a Murugappa Group company that specializes in engineering, bicycles, metal-formed products, and chains. It is based in Chennai.
In the December quarter, the firm's standalone net profit rose 12 percent YoY to ₹120 crore versus ₹107 crore in the year-ago quarter on the back of rising sales.
Meanwhile, the firm's revenue rose 30 percent to ₹1,701 crore in Q3FY22 from ₹1,309 crore in Q3 FY21.
“The results for the quarter show a steady performance by all the businesses. The Company is closely watching the impact of challenges of drop-in auto industry performance which has impacted domestic Tubes and Metal Formed business,” MAM Arunachalam, chairman of Tube Investments said post-earnings.
The firm recently announced that on the exchanges that it has set up a wholly-owned subsidiary to focus exclusively on clean mobility. The new arm will consolidate the electric three-wheeler venture and other electric vehicle-related businesses. The company will be infusing initial capital to the extent of ₹350 crore into the new subsidiary for clean mobility.
Most market experts have a 'strong buy' call on the stock on the back of upcoming opportunities, strong financials, and good diversification.
Geogit Financial Services, in a report, said, "keeping this fact in mind, we have selected a company, which is using its existing cash flows to build new technologies and make itself future-ready. The company has set out a vision to transform itself by looking at expanding the top line and bottom line through an inorganic route. Last year, it acquired CG Power and turned around the business. One can expect more such inorganic growth moves from the company."
As of December 2021 quarter, the Promoters held a 46.48 percent stake, while FIIs owned 26.43 percent and DIIs 14.62 percent.