By IANS,
Chennai : Bicycle and engineering products company Tube Investments of India Limited (TI) has closed FY08 with a revenue of Rs.17.62 billion and a net profit of Rs.565 million.
The corresponding figures for FY07 were Rs.16.15 billion and Rs.1.55 billion, respectively.
Referring to the results, the company’s new Managing Director L. Ramkumar said: “While the profitability was affected by slow down in segments of the auto industry and steep input cost increases, cost reduction efforts and growth in new segments mitigated the drop to some extent.”
TI’s board has recommended a dividend of Re 1 per equity share of face value Rs.2 for the year.
During FY08, the bicycles business consolidated its position and improved its market share. The turnover increased to Rs.5.77 billion, logging a growth of 13 percent. The off-take of bicycles by the trade segment was 16 percent higher than the previous year.
The company is also moving closer towards entering the growing electric bikes (scooters, motorcycles and cycles) market.
As per plans, TI will import the bikes in completely knocked down (CKD) form from Taiwan and China and assemble them at its Chennai facility.
Last fiscal, TI’s engineering business grew to Rs.8.16 billion, registering a growth of 5 percent, due to higher sales of cold rolled steel strips. Sale of precision steel tubes was lower by 2 percent due to the decline of the two wheeler segment, competition and lower realisation.
The efforts to broad base the user industry helped offset, to a certain extent, the decline in sales of cold drawn welded tubes. The exorbitant increase in steel price affected the operating profit of the division the most. The expansion of capacity at the international business plant has been completed.
The metal formed products business grew 14 percent, fetching Rs.3.70 billion for the period under review.
Higher sales across all product lines namely automotive, industrial chains, car doorframes, fine blanked products and roll formed railway wagon sections made this possible.
However, the profitability in this business was also under pressure due to steep increase in steel price. Exports of metal formed products went up by 6 percent, to Rs.820 million, despite Rupee appreciation.
TI is building a plant in West Bengal’s Singur to supply car door panels for Tata Motors’ $2,500 Nano and another plant at Pune in Maharashtra at an outlay of Rs.350 million to supply Tata’s new Indica.
The company is expanding its chain business by setting up a plant in Uttarakhand at Rs.400 million, mainly to supply Hero Honda Motors Ltd and others in northern India.
The company is planning to get into the speciality retail sector to sell sports, adventure, fitness and other products and has got the shareholders’ approval for this purpose recently.