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 TIIs Pat at Rs.89 Cr, Sales Performance Sustained
Tube Investments of India
Tube Investments of India
CHOLAMANDALAM FINANCIAL HOLDINGS LIMITED
(Formerly, TI Financial Holdings Limited)
TIIs Pat at Rs.89 Cr, Sales Performance Sustained
 

28th July, 2006

The Board of Directors of Tube Investments of India Limited (TII) met today to approve the un-audited financial results for the first quarter ended 30th June, 2006.

The first quarter sales of Rs. 413.06 crores are marginally higher than the corresponding quarter of the previous year (Rs. 410.90 crores). The profit before tax (PBT) was at Rs.98.65 crores (Rs.31.14 crores). The substantial increase in PBT is on account of profit on sale of some of the long-term investments of the Company amounting to Rs.71.30 cores. The profit after tax (PAT) was at Rs. 89.46 crores (Rs. 23.41 crores).

Mr. Sumit Banerjee, Managing Director, Tube Investments of India said, “The growth of the Indian manufacturing sector has been steady and impressive. The Company’s intent is to capitalise on this buoyancy and enhance revenues in all its chosen business segments. The organisation is today structurally geared and equipped to drive growth plans of our diverse businesses. However, the volatilities in input costs, manifested mainly in price movements of steel and oil, is a major challenge that we shall need to address.”

The revenue of the engineering business (Precision Tubes and Strips) was marginally lower compared to the corresponding quarter of the previous year. This marginal drop in sales was primarily due to lower volumes in exports, and some unforeseen disruptions in raw material supply chain. The Company is currently in the process of re-organising its tubes marketing network in the NAFTA region, the benefits of which can be expected to flow only from the third quarter onwards.

The Metal Formed Products of the Company include doorframes and chains. In doorframes, the overall off-take was good, despite a marginal drop in the demand of certain models. In Chains segment, the volumes of automotive chains as well as industrial chains registered significant growths. Exports of industrial chains were also higher than the corresponding quarter of the previous year. Overall sales in this Business grew by an impressive 20%.

The bicycle industry in the country suffers from various infirmities, including depressed growth, slender margins, age-old trade practices, etc. Due emphasis has been placed on bringing about all-round improvements in distribution systems to derive efficiency gains for the Company as well as its trade partners, and to also create better buying experience for the consumers. On the supply side, the Company deployed considerable resources to improve technical capabilities of its major vendors. The efforts to improve “secondary sales” have started yielding results and the number of bicycles sold through the market improved by 8% compared to the corresponding quarter of the previous year. However, overall sales were marginally lower in the absence of any institutional sales during this specific period.

The Company had earlier entered into a Memorandum of Understanding (MoU) with the Government of Orissa for establishment of a steel plant. Considering the present steel scenario, the Company has now decided not to proceed with the steel project and to withdraw from the said MoU with the Government of Orissa.

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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