The Conglomerate Playing 4D Chess (And Possibly Losing)

Welcome to TII: Where Good Divisions Fund Bad Bets

Tube Investments is not one company. It’s six companies wearing the same shirt, three of them trying to become something else, and one of them actively losing money faster than it can be replaced.

At its core: engineering, metal-formed products, and bicycles. Standard industrial fare. Reliable. Boring. Profitable. The engineering division (CDW tubes, CRS strips) threw up double-digit growth in Q3 despite export headwinds. Metal-formed products (chains, stamped parts) trudged along, hamstrung by railway delays. Cycles turned profitable for the first time in years — thank you, e-bikes.

But then you look at the consolidated picture and the narrative changes. Through wholly-owned and majority-held subsidiaries, TII operates power systems (58% of CG Power), gearboxes (70% of Shanthi Gears), and increasingly, electric vehicles through TI Clean Mobility. The EV bet is the aggressive one. The confidence is real. The losses are realer.

In Q3 FY26 alone, TI Clean Mobility burned ₹164 crore. The parent has committed to funding ₹500–750 crore more over the next couple of years. The company also approved a ₹300 crore borrowing in May 2025 and raised ₹3,000 crore as QIP for a semiconductor assembly project through CG Power. Capital allocation is moving fast. Valuation multiples are not.

Here’s what you need to know: the core businesses are healthy. The PE multiples are grotesque. And the EV venture is either the smartest bet management has made or the most expensive way to lose shareholder capital. The Feb 2026 concall gave us some clarity on which.

Engineering Pays The Bills. Everything Else Is Hope.

Let’s start with the mothership. Tube Investments manufactures cold-drawn welded (CDW) tubes — India’s market leader at ~51% share. Also: cold-rolled steel strips (CRS). Also: electric resistance welded tubes. These go into cars, motorcycles, construction equipment, railways, and mining. It’s not exciting. It’s what actually makes money.

Metal-formed products division: chains (automotive, transmission), fine-blanked stamped parts, door frames for passenger coaches. Another steady cash generator. Both divisions lean on industrial scale — 35+ manufacturing plants nationwide — and customer stickiness that takes years to build and cannot be replicated overnight by a competitor offering 2% better pricing.

Cycles (BSA, Hercules, Montra): 25% market share in the retail segment. Historically a dead product category in India — smartphones killed the commute bike. Then e-bikes happened. Q3 revenues climbed to ₹183 crore (vs ₹142 crore YoY). More importantly, it turned profitable — PBIT of ₹4 crore vs a ₹0.8 crore loss last year. The narrative has shifted from “when will cycles go away” to “how fast can e-bikes scale.”

Then the subsidiaries. CG Power (58% owned): transformers, motors, industrial systems. Top-10 globally in transformers. No. 1 in Indian motors. Q3 revenues ₹3,175 crore, profit ₹420 crore. Single-handedly funding the parent’s expansion dreams. Shanthi Gears (70% owned): gearboxes, specialized equipment. Q3 profit fell 34% YoY to ₹23 crore. Management blames order book slowdown. Translation: Shanthi is struggling.

Finally: TI Clean Mobility. Subsidiary burning cash. ₹164 crore loss in Q3. Yet management insists it’s on a path to breakeven — 3W and M&HCV first (12–18 months per them), then SCV, then tractors. The company has 117 dealerships covering ~65–70% of the relevant addressable market. Volumes are coming — Q3 saw 1,816 3Ws sold, 301 SCVs, 56 M&HCVs. But every unit sold loses money.

Q3 FY26: The Numbers That Raise Questions

Result type: Quarterly Results (Q3 FY26; Dec 31, 2025)  |  Q3 Standalone EPS: ₹8.57  |  Annualised EPS (Q3×4): ₹34.28  |  TTM EPS: ₹30.90

What’s This Conglomerate Actually Worth?