Tube Investments of India has announced its Q2FY22 results. The stock has increased on 2nd Nov 2021 by more than 10%.
Standalone Highlights
Revenue for Q2FY22 stood at Rs. 1,676 crores. Revenue grew by 53.1% YoY and 32.2% QoQ.
Revenue from Operations increased by 53.3% YoY and stood at Rs. 1,667 crores. Revenue also grew by 32.6% QoQ.
Operating Profit Margins have been impacted as they have also decreased on YoY and QoQ basis.
Due to operating margins impact, the PAT have increased relatively lesser than revenue. PAT stood at Rs. 121 crores, a growth of 26.6% YoY and 25.2% QoQ.
Consolidated Highlights
The consolidated revenue increase has been good as it has increased by almost 173% YoY to Rs. 3,288 crores. A growth of 33.5% can also be seen.
Operating profit margins
Operating margin have been impacted on the consolidated numbers too. OPM has decreased by 12.2% in Q2FY22.
PAT has increased by 70% YoY and stands at Rs. 168.5 crores. PAT has also seen a growth of 40.4% QoQ.
Business Highlights
Majority of the revenue came from Industrial Systems in Q2FY22. In last quarter previous year, the majority of revenue was contributed from Engineering division.
Mobility division has shown the highest growth. Whereas Gears & Gear products have shown a subdued growth.
Revenue from Engineering stood at Rs. 1026.64 crores, YoY growth of 26%. The Profit for the segment stood at Rs. 102 crores, a YoY growth of 23%.
Metal formed products had a revenue of Rs. 328.28 crores as and profit of Rs. 38.13 crores. A YoY growth of 34% and 49% respectively.
Mobility business revenues stood at Rs. 266 crores, a YoY growth of 52%. Mobility Profits stood at Rs. 16.76 crores, a YoY growth of 123%.
Gear and Gear products form a small part of total revenue contributed, only about 2% in Q2FY22. The revenue increased by only 7% on YoY basis and stood at Rs. 71.77 crores. The profits has a small decline and stood at Rs. 11.34 crores.
Power systems revenue stood at Rs. 390.49 crores, a YoY growth of 38% and profits declined to Rs. 31.57 crores, a YoY decline of (-1%).
Industrial systems had a revenue of Rs. 1059.37 crores in Q2FY22, having the largest contribution of 32% in the revenue mix. It grew by 39% on YoY basis. The profit also stood at Rs. 109.34 crores with YoY growth of 178%.
Other businesses revenue stood at Rs. 190.2 crores, YoY growth of 23% and profit growth of 29% in Rs.13.57 crores.
Industrial Segment contributed 34%, most among the segment to the profit mix in Q2FY22.
Engineering Segment contribution was the highest in Q2FY21 but currently stands second.
Earnings call Highlights
Strong exports and gain in market share has led to improvement in revenues.
Chip shortages affecting OEM demands.
Rs. 200-250 crores of CAPEX can be expected.
Significant rise in raw material prices leading to an impact on gross margins.
Recovery through price increase will happen in coming quarters.
Delay in electric 3 wheelers launch due to COVID. The management has not taken decision about the geography of the launch.
Dividend policy will continue its current form.
Aims to move away from auto component supplier business.
Mobility
Revival in mobility will take some quarters.
Exports in cycles have shown growth but is not that significant.
Gained 1% market share in domestic business. Total market share in bicycles is around 25%.
Softer market as compared to last year.
Domestic contribution in mobility is 97%.
Metal Formed Products
Growth mainly driven by automotive chains and industrial chains.
Autos and railways form most of the business in metal formed products.
Other businesses have increased share when railways were down.
Improvement in railways can be seen in Q3FY22 and Q4FY22 as railways have increased their operations.
Export content is relatively less as compared with other segments.
Contribution margins are relatively higher, hence effect of raw material business price increase has not been much.
Other segment
Comprises mainly chains and some new businesses which are currently ramping up.
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