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Motilal Oswal Report
Tube Investments of India Ltd.'s Q4 FY24 result was operationally weak, as margin came in at 11.1% (versus estimate: 12.7%), mainly due to higher other expenses and rising competition in its metal-formed business on the railway side.
Tube Investments of India has further outlined a capex of Rs 4.7 billion for TI Clean Mobility Pvt. Ltd., expecting these businesses to be the future growth drivers despite a delay in ramp-up.
We cut our FY25E/FY26E consolidated earnings per share by ~8/7%% to factor in margin pressure in the metal-formed business.
We value its electric vehicle vertical (ex- SCV) at Rs 350 per share in the SoTP after assigning a value to its e-HCV business.
The stock trades at 60 times/49 times FY25E/FY26E consolidated earnings per share.
We reiterate our Buy rating with a target price of ~Rs 4,400 (premised on Mar'26 SoTP).
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