Tube Investments of India: ₹2,808, 84x P/E – The Auto Supplier Acting Like a Tech Unicorn

At a Glance

Tube Investments (TII) is the Murugappa Group’s engineering jewel making everything from bicycle chains to electric trucks. It’s also pricing itself like it invented AI. With a P/E of 84, flat profits, and a recent GST penalty to add spice, this stock is testing investors’ appetite for premium auto ancillary bets.

Introduction

Imagine an auto-component company that thinks it’s a Tesla startup. That’s Tube Investments. While revenue is climbing steadily (15% TTM growth), profits are stuck in a traffic jam (-25% TTM). The market is still paying a premium because TII keeps sprinkling new ventures – TMT bars, electric mobility, optic lenses – like confetti at a wedding. Is it innovation or just diversification for the sake of PowerPoint slides?

Business Model (WTF Do They Even Do?)

TII operates through three main segments:

1. Engineering: Steel tubes, chains, automotive parts – bread and butter for decades.
2. Metal Formed Products: Car doors, panels, precision metal components.
3. Cycles & Others: Bicycles under brands like BSA and Hercules – nostalgic but barely profitable.

New Bets: Truck body building, TMT bars, EV subsidiary TI Clean Mobility (raising funds aggressively), and optics for cars. Basically, they want a finger in every pie.

Financials Overview

Commentary: Revenue grew, margins shrank, PAT fell. Still, investors act like TII discovered perpetual