Aditya Birla Money is bullish on Tube Investment of India and has recommended buy the stock with a target of Rs 190 in its August 10, 2012 research report.
"Tube Investments of India Ltd. (TI) Q1FY13 results were below expectations on the standalone front due to lower-than-expected sales volumes and continued cost pressure in the metal-formed products and engineering divisions. However, its financial services subsidiaries -Cholamandalam Investment & Finance Company Ltd. (CIFCL) and Cholamandalam MS General Insurance Co. Ltd. posted a strong set of numbers,"
"TI’s Q1FY13 consolidated net profit grew 14.1% YoY and 10.3% QoQ to `847.7mn on account of strong performance of its financial services subsidiaries: CIFCL and Cholamandalam MS General Insurance Co. Ltd. CIFCL’s net profit for the quarter grew115.7% YoY and 14.9% QoQ to `698.1mn. For the quarter, CIFCL grew its disbursements by 52% to `25.4bn. CIFCL’s net loan book for the quarter grew 44.5%YoY and 10.1% QoQ to `134.8bn while its GNPA and NPA continued to be low at0.88% and 0.33%, reflecting quality growth. Cholamandalam MS General InsuranceCompany Ltd., a general insurance subsidiary of TI, registered a significant growth of25% YoY in Gross Written Premium during the quarter. Its PAT grew 83.3% YoY to`110mn,"
"On a standalone basis, TI’s EBITDA declined 11.6% YoY and 4.8% QoQ to `907mn on account of (1) a sharp drop in performance in the metal formed products division due to lower sales volume, higher costs and pricing pressure and (2) cost pressure in the Engineering division. On account of lower-than-expected sales volumes, we reduce our volume assumptions for FY13E and FY14E. We cut our FY13E and FY14E EPS by 8.5% and 5.0% to `10.0 and `10.9 respectively. We view TI’s acquisition of Shanthi Gears as a strategic fit and positive from a long term perspective," says Aditya Birla Money research report. Bodies Corporate holding more than 50% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment
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