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Informist, Monday, Aug. 4, 2025

 

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--Tube Investments: Hope to avail PLI for EVs by next quarter 
--Tube Invest: Focus on cost cuts, raising volume to improve gross margin 
--Tube Invest: Hope to recover rising steel costs from customers by Q2 
--Tube Invest: Long-term prospects positive for mobility division 
--Tube Invest: May enter cargo segment in Jul-Sept 
--CONTEXT: Comments by Tube Invest management in post-earnings analyst call 
--Tube Invest: Ownership issues won't impact minority shareholders 
--Tube Invest: Stepping up on go-to-market strategies 
--Tube Investments: Start of battery packaging ops will reduce EV costs 
--Tube Invest: Battery swapping for trucks could begin by end of this year 
--Tube Invest: Plan INR 3.5-bln capex in FY26 
--Tube Invest: Expect volumes for railways to ramp up from next year 
--Tube Invest: Pune plant to contribute to volumes from October 
--Tube Invest: See double-digit EBITDA growth for standalone ops going ahead 
--Tube Invest: US accounts for 4% of sales, 15% of exports at group level 
 

 

By Akash Mandal and Sunil Raghu

 

MUMBAI – Tube Investments of India Ltd. is planning to enter various new segments and ramp-up its presence in some existing segments, especially its electric vehicle operations, in order to drive earnings and volume growth going forward. The Chennai-based engineering company will spend INR 3.5 billion in capital expenditure for the standalone business in 2025-26 (Apr-Mar), its management said in an after-earnings conference call. The investment will be made in the engineering and metal form segments, the company said.

 

The company said its electric-three wheeler and heavy-commercial vehicle segments are unlikely to break-even by FY26 end, as per the company's earlier guidance. "...that's been predominantly based on our volumes not getting to the estimates that we thought that we could basically deliver...at this stage, I would say that, you know, though we did give that guidance, I don't believe we will hit it," the management said. The management said it sees the company's earnings before interest, tax, depreciation and amortisation growth for its standalone business to grow in double digits going ahead.

 

The company said it will ramp up its electric vehicles segment going forward. On the electric three-wheeler segment, the company said it will drive growth using four levers amid increased competition--the refresh model, wherein existing models are refreshed and updated. Secondly, the company will look to introduce replaceable battery packs, which will support a higher range. The company said its battery packaging operations will launch soon, which will reduce EV costs for the company. It said battery swapping for trucks could begin by end of the current year.

 

The third lever, according to the company, is to improve volumes by entering new segments such as cargo, a segment which might start from the September quarter. The company also said it plans to enter the electric-rickshaw segment by the December quarter. Finally, the company said it has "a full-fledged front-end plan in terms of the number of dealerships, manpower, and how to scale up."

 

The company said it hopes to avail the recently-announced production-linked incentives from the government by the September quarter. "There are various eligibility criteria in terms of various components which have been prescribed by the government...we are very, very confident that in Q2, we will be applying for the eligibility of the same. And I think by the time we meet for the next investor call, our application would be underway for the qualification under PMV drive (PM Electric Drive Revolution in Innovative Vehicle Enhancement)," the management said. The company also plans to step up its go-to market strategies going forward.

Overall, it remains positive on the long-term prospects of the mobility division, and said it is focussed on cutting costs and ramping-up volumes to improve gross margin. The company also expects volumes in its railways segment to ramp up from next year. It also said its new Pune plant, which will manufacture precision steel tubes, will contribute to volumes from October.

On issues related to a rift between the Murugappa group, promoters of the company, the management refused to comment. "No, I don't think there's anything to discuss from that perspective, right? ... we don't anyway discuss any of the family issues in public domain. Whatever comes out in media has come up," the management said. However, it reassured that no section of shareholders will be negatively impacted due to a rift in the promoter group.

 

On steel prices, the company said it sees it taking a couple of quarters to pass on the higher steel prices. "...it takes about one or two quarters lag, which we'll be able to recover fully in the coming quarter or next quarter. The steel price increase is already factored in the financials, but recovery from the customers is yet to happen, which will be happening in the current quarter and the next quarter. So, after that, margins will look like what we used to maintain earlier," the management said.

 

The company added that uncertainties around the US market will have to be monitored going ahead, and said that it would be difficult to provide a guidance due to the volatility. The US market accounted for 4% of the company's top line and 15% of its exports at the group level, the management said. 

 

The engineering company had declared its June quarter earnings during market hours Friday. The company posted a net profit of INR 1.68 billion on revenues of INR 20.07 billion for the quarter. At 1259 IST, shares of Tube Investments were trading at INR 2,893 on the National Stock Exchange, up 3% from the previous close. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Nishant Maher

 

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