Hold Tube Investments of India; target of Rs 3933: Asit C Mehta

Asit C Mehta report on Tube Investments of India

Revenue for Q4FY24 was Rs.1,962 Cr. as against Rs.1,663 Cr. in the same quarter previous year. Total revenue from operations grew by 6% in FY24 standing at Rs.7,611 Cr. compared with Rs.7,236crs in the previous year. Mobility and engineering business segments were the drivers of growth, thereby growing 11% and 8% respectively. EBITDA Margins for FY24 were seen at 12.1%, which was in line with our expectations of 12.2%. The EBITDA was seen at 924crs vs 881crs in FY23, ie a growth of 5% YoY. PAT Margins were stable at ~10% in FY24, despite of global headwinds and challenges faced during the year. EPS for the year now stands at 37.9 vs 34.5 ie an increase of 340bps YoY. TIINDIA is on track to establish its greenfield precision steel tube manufacturing facility in Western India by FY25. The company established a a strong network of dealers in northern india, with the aim to establish its presence in this part of the country.

Outlook

As per our estimates, we expect the standalone business to generate an EPS of ₹ 42/- for the year ended March 26E. We maintain the PE multiple at 40x. The standalone price target is estimated at ₹ 2183/-. We add the value of listed subsidiaries at ₹ and unlisted investments at Rs 69/-. The SOTP price target is expected to be ₹ 3933/-. TIINDIA continues to be rated as (HOLD).

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