Buy Tube Investments of India; target of Rs 3515: Motilal Oswal

Motilal Oswal's research report on Tube Investments of India

Tube Investments’ (TIINDIA) 1QFY26 PAT of INR1.68b was ahead of our estimate of INR1.61b, primarily aided by higher other income even as EBITDA margin was in line with our estimate. Improved mobility division margin surprised positively. We expect standalone revenue to pick up in the coming quarters, led by supplies to a new Hyundai Pune plant that is likely to commercialize from Oct25, the ramp-up of a new CRSS plant, and the execution of a Railways order from 4QFY26. Adjusted for stakes in CG Power and Shanti Gears, standalone business is attractively valued at 16.4x/14.2x FY26E/FY27E EPS. Reiterate BUY with a TP of ~INR3,515 (premised on Jun’27E SOTP, based on 30x PER for the standalone business, valuing listed subsidiaries at 30% HoldCo discount).

Outlook

Reiterate BUY with a TP of ~INR3,515 (premised on Jun’27E SOTP, based on 30x PER for the standalone business, valuing listed subsidiaries at 30% HoldCo discount).