Tube Investment of India Q2 Results Review - Performance Below Estimates; H2 To Be Better: Motilal Oswal

Motilal Oswal Report

Tube Investments of India Ltd.’s Q2 FY25 result was weak, with standalone Profit before interest and tax margin at 9.9% (-110 bp YoY, versus estimate 10.6%), hit by one-offs in engineering segment and railway pricing challenge.

However, management remains optimistic for H2 FY25, expecting strong two-wheeler volumes, improved exports, and diversification beyond automotive that would drive growth.

We cut our FY25E/FY26E consolidated earnings per share by 24%/14% to factor in moderate demand in domestic passenger vehicles and commercial vehicles and slower than expected ramp-up at CG Power.

The stock trades at 65x/54x FY26E/FY27E consolidated EPS. Reiterate Buy with a target price of ~Rs 4,750 (premised on Sep-26E SoTP).

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