Tube Investments of India Ltd Q1 FY25 – “Bicycles, Motors, Gears, EVs, Whisky Next? A 102x P/E Murugappa Masala” 🚲⚙️⚡
1. At a Glance
Tube Investments (TII) is like that overachieving kid in class who wants to win every prize — from cycling race to robotics to singing competition. The company runs tubes, gears, cycles, EVs, transformers, medical devices, optics, pharma CDMO, and camera modules — all under one Murugappa Group umbrella. Q1 FY25 saw revenue of ₹5,309 Cr (+16% YoY) but profit fell 13% YoY to ₹199 Cr. Yet, the stock trades at a spicy 102x earnings. Because apparently, diversification = valuation steroids.
2. Introduction – The Murugappa Buffet
If Tata is the “paratha-thali,” Murugappa is the “filter coffee with 12 snacks.” Tube Investments is their most ambitious plate:
31% of sales from Industrial Systems (motors, drives, alternators).
28% from Engineering (tubes, steel strips).
15% from Power Systems (via CG Power, India’s #1 motors maker).
9% from Metal Formed Products (chains, door frames, stamped parts).
4% from Mobility (cycles: BSA, Hercules, Montra).
3% from Shanthi Gears (70% stake).
10% “Others” (EVs, optics, medical consumables, surgical products, etc).
Plus, they bought a pharma CDMO business, a camera module company, and have an EV sub (TICMPL) which raised ₹3,000 Cr in FY24.
Translation: If it moves, rotates, connects, or even cures — TII wants to be in it.
But here’s the twist: despite ₹20,196 Cr sales in FY24, PAT was only ₹647 Cr. That’s a net margin of 3.2% — thinner than a BSA bicycle tyre.
Question for you: Do you like your conglomerates lean and mean, or bloated with every random new venture under the sun?
3. Business Model – WTF Do They Even Do?
Explaining TII’s business is like explaining “Hera Pheri” plot to a foreigner — it looks messy but somehow works.
Industrial Systems (31%): They make electric motors, drives, alternators, traction equipment. Clients = power, cement, mining, railways. Basically, the industrial heartbeat.
Engineering (28%): Tubes and strips. They’re the market leader in CDW tubes (auto and non-auto). Think of them as India’s “structural skeleton supplier.”
Power Systems (15%): CG Power, acquired in 2020, makes transformers and motors. This was a Murugappa masterstroke — turned around a debt-laden company into India’s motor leader.
Metal Formed (9%): Automotive chains and stamped parts. If your bike chain isn’t Chinese, it’s probably TII.
Mobility (4%): Cycles and fitness equipment. Hercules and BSA = nostalgia, Montra = “cool kid” branding. Market share ~25%.
Shanthi Gears (3%): Custom gearboxes. Industrial niche but profitable.
Others (10%): EVs (3W, tractors, CVs), medical disposables, optical lenses, camera modules, pharma CDMO. Basically, “new-age side hustles.”
This isn’t a single business. It’s an industrial mutual fund with Murugappa stamp.
