Tube Investments of India Ltd's Q2FY19 consolidated net profit rises 51% yoy to Rs64cr : Beats Estimates

The company’s consolidated revenue stood at Rs1,495cr, up 17% yoy and 1% qoq.

Nov 02, 2018 04:11 IST India Infoline Research Team

Tube Investments of India Ltd Q2FY19

Consolidated Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
Revenue 1,495.40 16.5
Net Profit (reported) 63.81 50.7

Tube Investments of India (TII) reported strong numbers in Q2FY19 at the consolidated level. Consolidated revenue was up 17% yoy (1% qoq) at Rs1,495cr. This was better than consensus estimate of Rs1,342cr. While input costs put pressure on its gross profit, TII was able to control its operating costs leading to 95bps yoy (43bps qoq) expansion in EBITDA margin at 9.8%. Absolute EBITDA was up 29% yoy (5% qoq) at Rs147cr, surpassing consensus estimate of Rs111cr. PAT growth rate was much higher than EBITDA growth due to lower tax rate and interest expenses and flattish depreciation expenses. Consequently, it reported consolidated PAT of Rs64cr, up 51% yoy (7% qoq), significantly surpassing consensus PAT estimate of Rs46cr.

Other Highlights

  • The Engineering division, which is the largest division, contributing 50% to consolidated revenues, saw revenue growth of 36% yoy (8% qoq). The division recorded 18% yoy growth in volume of tubes. Also, the large diameter tube plant saw 41% volume growth and maintained EBIT margin at 8% (vs. 8% in Q2FY18 and 9% in Q1FY19). Consequently, ROCE for the division improved to 37% in H1FY19 against 25% in H1FY18.
  • The second largest division, Metal Formed Products, contributing 26% to consolidated revenues, reported 18% yoy (9% qoq) revenue growth, along with margin expansion of 180bps yoy (59bps qoq) to 8.2%. Revenue growth for the segment was led by strong volume growth for doorframes segment (up 15% yoy), chains (13% yoy) and kits (16% yoy).
  • Cycles and Accessories segment, contributing 20% to consolidated revenue, saw decline in revenue (down 13% yoy and 17% qoq) due to challenging condition of the bicycles segment. The revenue drop of 13% yoy for this division in Q2FY19 comprised of a 4% volume drop. However, we expect revenues for this segment to revive somewhat in H2FY19 due to deferment of institutional sales to H2FY19.
  • On the balance sheet side, total cash and liquid investments on consolidated books of the company as on September 31, 2018 was up 67% from March 31, 2018, while total debt was up 18%. Long term debt remained steady while short term debt increased 32%. Consequently, D/E ratio increased marginally from 0.42x as on March 31, 2018 to 0.45x as on September 30, 2018.

Technical View:

Tube Investments of India Ltd ended at Rs. 293.65, down by 3.15 points or 1.06% from its previous closing of Rs. 296.80 on the BSE.
The scrip opened at Rs. 301.40 and touched a high and low of Rs. 301.40 and Rs. 291.30 respectively. A total of 20,452 (NSE+BSE) shares were traded on the counter. The stock traded below its 50 DMA.

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