Motilal Oswal's research report on Tube Investments of India
Tube Investments (TIINDIA)’s 2QFY25 result was weak, with standalone PBIT margin at 9.9% (-110bp YoY, vs. est. 10.6%), hit by one-offs in engineering segment and railway pricing challenge. However, management remains optimistic for 2HFY25, expecting strong 2W volumes, improved exports, and diversification beyond automotive that would drive growth. We cut our FY25E/FY26E consolidated EPS by 24%/14% to factor in moderate demand in domestic PVs and CVs and slower than expected ramp-up at CG Power. The stock trades at 65x/54x FY26E/FY27E consol. EPS. Reiterate BUY with a TP of ~INR4,750 (premised on Sep’26E SoTP).
Outlook
The stock trades at 65x/54x FY26E/FY27E consolidated EPS. Reiterate BUY with a TP of ~INR4,750 (premised on Sep’26E SOTP, based on 36x for the standalone business, valuing listed subsidiaries at 15% HoldCo discount and adding INR353/share for the three EV businesses).
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