CHOLAMANDALAM FINANCIAL HOLDINGS LIMITED
(Formerly, TI Financial Holdings Limited)
(Formerly, TI Financial Holdings Limited)
Financial Results of Tube Investments of India Limited
31st October, 2006
Financial Results of Tube Investments of India Limited
The Board of Directors of Tube Investments of India Limited (TII) met today to take on record the un-audited financial results for the second quarter ended 30th September 2006.
In Q2, the sales were Rs.456.79 Crores, recording a growth of 17% on Rs.389.86 Cr for the same period last year. Net profit for the quarter was, however, lower at Rs.26.37 Crores (Rs.31.38 Crores - Q2 Last Year).
In the engineering business, the production and sale of tubular products was lower than our expectations. The domestic automotive industry as a whole is growing rapidly and thereby becoming more and more open and competitive. Owing to rise in basic input costs, margins in the Engineering Business were under pressure. This Business, has, however, made a beginning in delivering value-added and high-engineered tubular components to automotive customers, and we believe this to be the future direction for the Business. The Company’s export of tubes was also lower in the second quarter in view of the planned re-alignment of export/distribution strategy in the North American region. In this context, Market Development activities initiated in the developed geographies of Europe and Americas, have started generating positive responses from major global customers, and will bear fruit in later progressively.
In the Metal Forming Business, the overall demand was higher during the quarter. The trend in the off-take for the new models of our customers is also encouraging. There has been some initial delay in the execution of company’s plans with regard to design and manufacture of auto components through the use of hydro-forming technology. The sales of fine blanked components, automotive chains as well as export of industrial chains witnessed a healthy uptrend in the second quarter. Company’s Industrial Chain Products have found acceptance with some of the most reputed global customers, which is a recognition of its engineering and manufacturing capabilities.
The focus in the bicycle business continued to be on restructuring the distribution network; our efforts have started yielding desired results across all segments and markets. The company has planned to have more dedicated outlets for its products under the style “BSA Go”. So far, the performance of these outlets is promising with improvements in sales of existing and new products.
Consequent to his becoming ‘Executive Chairman’ of the Murugappa Corporate Board, Mr. M A Alagappan has stepped down as Chairman and Director of TII. Mr. M M Murugappan, who was Vice Chairman, has been appointed as ‘Non-executive Chairman’ of the TII with effect from 1st November, ‘06.
Due to personal reasons, Mr. Sumit Banerjee, Managing Director has submitted his resignation as Managing Director as well as Director of the Company. His resignation has been accepted by the Board of Directors at its meeting held today. Mr. Sumit Banerjee is expected to be relieved of his responsibilities by end December, 2006.
About Tube Investments of India
Tube Investments of India consists of TI Cycles of India, Tube Products of India, TI Metal Forming (including Chains). In bicycles, TII is the second largest manufacturer with well-known brands - Hercules, BSA and Philips. TII is the market leader in precision steel tubes and roll-formed car doorframes in India. Also, being the second largest motor cycle chain manufacturer in India, TII is a major supplier to the Indian auto / auto- component industry.
About the Murugappa Group
Headquartered in Chennai, the $1.6 billion Murugappa Group is India’s leading business conglomerate, which fosters an environment of professionalism for its strong workforce of 28,000 employees. The group has 29 registered companies, which are market leaders in diverse areas on business viz. engineering, abrasives, finance, general insurance, sanitary ware, cycles, sugar, farm inputs, fertilizers, plantations, bio products and nutraceuticals. The Group has manufacturing units in 12 states.
The Group has forged strong joint venture alliances with leading international companies like Roca of Spain, Cargill of Geneva, Cerdak of South Africa, Jingri Diamond Industrial Company of China, DBS Bank of Singapore, Mitsui Sumitomo of Japan and Groupe Chimique Tunisien of Tunisia and has consolidated its status as one of the fastest growing diversified business house in India.
For further information please contact:
K Balasubramanian
Chief Financial Officer
Ph: 044-4211 0505 / 98402 96153
E-mail: BalasubramanianK@tii.murugappa.com
Chandrika Raman
Sr. Manager-Group Corporate Communications
Ph: 044 2530 6535 / 98400 71172
E-mail: ChandrikaR@corp.murugappa.com
Financial Results of Tube Investments of India Limited
The Board of Directors of Tube Investments of India Limited (TII) met today to take on record the un-audited financial results for the second quarter ended 30th September 2006.
In Q2, the sales were Rs.456.79 Crores, recording a growth of 17% on Rs.389.86 Cr for the same period last year. Net profit for the quarter was, however, lower at Rs.26.37 Crores (Rs.31.38 Crores - Q2 Last Year).
In the engineering business, the production and sale of tubular products was lower than our expectations. The domestic automotive industry as a whole is growing rapidly and thereby becoming more and more open and competitive. Owing to rise in basic input costs, margins in the Engineering Business were under pressure. This Business, has, however, made a beginning in delivering value-added and high-engineered tubular components to automotive customers, and we believe this to be the future direction for the Business. The Company’s export of tubes was also lower in the second quarter in view of the planned re-alignment of export/distribution strategy in the North American region. In this context, Market Development activities initiated in the developed geographies of Europe and Americas, have started generating positive responses from major global customers, and will bear fruit in later progressively.
In the Metal Forming Business, the overall demand was higher during the quarter. The trend in the off-take for the new models of our customers is also encouraging. There has been some initial delay in the execution of company’s plans with regard to design and manufacture of auto components through the use of hydro-forming technology. The sales of fine blanked components, automotive chains as well as export of industrial chains witnessed a healthy uptrend in the second quarter. Company’s Industrial Chain Products have found acceptance with some of the most reputed global customers, which is a recognition of its engineering and manufacturing capabilities.
The focus in the bicycle business continued to be on restructuring the distribution network; our efforts have started yielding desired results across all segments and markets. The company has planned to have more dedicated outlets for its products under the style “BSA Go”. So far, the performance of these outlets is promising with improvements in sales of existing and new products.
Consequent to his becoming ‘Executive Chairman’ of the Murugappa Corporate Board, Mr. M A Alagappan has stepped down as Chairman and Director of TII. Mr. M M Murugappan, who was Vice Chairman, has been appointed as ‘Non-executive Chairman’ of the TII with effect from 1st November, ‘06.
Due to personal reasons, Mr. Sumit Banerjee, Managing Director has submitted his resignation as Managing Director as well as Director of the Company. His resignation has been accepted by the Board of Directors at its meeting held today. Mr. Sumit Banerjee is expected to be relieved of his responsibilities by end December, 2006.
About Tube Investments of India
Tube Investments of India consists of TI Cycles of India, Tube Products of India, TI Metal Forming (including Chains). In bicycles, TII is the second largest manufacturer with well-known brands - Hercules, BSA and Philips. TII is the market leader in precision steel tubes and roll-formed car doorframes in India. Also, being the second largest motor cycle chain manufacturer in India, TII is a major supplier to the Indian auto / auto- component industry.
About the Murugappa Group
Headquartered in Chennai, the $1.6 billion Murugappa Group is India’s leading business conglomerate, which fosters an environment of professionalism for its strong workforce of 28,000 employees. The group has 29 registered companies, which are market leaders in diverse areas on business viz. engineering, abrasives, finance, general insurance, sanitary ware, cycles, sugar, farm inputs, fertilizers, plantations, bio products and nutraceuticals. The Group has manufacturing units in 12 states.
The Group has forged strong joint venture alliances with leading international companies like Roca of Spain, Cargill of Geneva, Cerdak of South Africa, Jingri Diamond Industrial Company of China, DBS Bank of Singapore, Mitsui Sumitomo of Japan and Groupe Chimique Tunisien of Tunisia and has consolidated its status as one of the fastest growing diversified business house in India.
For further information please contact:
K Balasubramanian
Chief Financial Officer
Ph: 044-4211 0505 / 98402 96153
E-mail: BalasubramanianK@tii.murugappa.com
Chandrika Raman
Sr. Manager-Group Corporate Communications
Ph: 044 2530 6535 / 98400 71172
E-mail: ChandrikaR@corp.murugappa.com
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