Tube Investments of India Limited (TIINDIA) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Tube Investments Q4FI26 Earnings Call hosted by IIFL Capital Services Limited. All participants are currently in listen-only mode. There will be an opportunity to ask questions following the conclusion of the management's opening remarks. Please note this conference is being recorded. I now hand the conference over to Mr. Joseph George from IIFL Capital. Thank you and over to you, sir.

Thank you, Inga. On behalf of IFL Capital, I welcome you all to the 4QF526 results conference call of Q Investments of India Limited. From the management, we have with us Mr. M.A.M. Arunachalam, Executive Chairman, Mr. Mukesh Ahuja, Managing Director, Mr. A.N. Manitmaiapin, Chief Financial Officer, as well as all the Divisional Legs. I will now hand over the call to the management for opening remarks, post which we will take to him.

Thank you. So, good evening. The Board of Directors of Tube Investments of India met today and approved the financial results of the quarter and year in the 31st March 2026. The Board has declared and paid an interim dividend of Rs. 2 per share in February 2026. The Board has now recommended a final dividend of Rs. 1.50 per share for the financial year 2025-2026. The standalone results for the quarter, the revenue in Q4 was 2,279 crore compared to 1,957 crore of the same period previous year. The revenue for the full year was 8,556 crore against 7,893 crore of previous year. PBT before exceptional items and fair value gain on CCPS for the quarter was at 361 crore compared to 327 crore of the same period of the previous year. TBT before exceptional items and fair value gain on CCPS for the full year was 1099 crore as against 975 crore of the previous year. ROIC stood at 44% for the year end of 31st March 2026, compared to 44% reported in the previous year. Free cash flow for the quarter was 313 crores. Cumulated free cash flow for the year was 826 crores, that is, 100% of P80. Doing the businesses, engineering, the revenue for the quarter was 1499 crores compared to 12299 crores in the corresponding quarter of the previous year. Profit before interest and tax for the quarter was 176 crores against 142 crores in the corresponding quarter of the previous year. The revenue for the full year was 5612 crores compared to 5029 crores in the previous year. Profit before interest and tax for the full year was 689 crores compared to 617 crores in the previous year. Mental form products, the revenue for the quarter was 421 crore compared to 403 crore in the corresponding quarter of the previous year. Profit before interest and tax for the quarter was 35 crores against 39 crores in the corresponding quarter of the previous year. The revenue for the full year was 1603 crore compared to 1565 crore in the previous year. Profit before interest and tax for the full year was 162 crores against 161 crore in the previous year. Mobility business, the revenue for the quarter was 208 crores compared to Revenue for the full year was 783 crores compared with 671 crore in the previous year. Profit before interest and tax for the full year was 19 crore against 5 crore in the previous year. The others, revenue for the quarter was 246 crores compared with 244 crores in the corresponding quarter of the previous year. Profit before interest and tax for this quarter was 16 crores against 13 crores in the corresponding quarter of the previous year. Revenue for the full year was 923 crores compared with 987 crores in the previous year. PBIT was 70 crores against 48 crores in the previous year. The consolidated results, TII's consolidated revenue for the quarter was 6,215 crore against 5,150 crore in the corresponding quarter of the previous year. The PBIT, before share or profit of associate joint ventures, exceptional items, loss on fair values of CCPS and tax, for the quarter was 516 crore, against 479 crore in the corresponding quarter of the previous year. For the year 31st March 2026, TII's consolidated revenue for the year was 22,847 crore against 19,465 crore in the previous year. The profit, before share of profit of associate joint ventures, exceptional items, loss on fair valuation of CCPs and tax, was 1937 crore against 1801 crore in the previous year. CG Power Industrial Solutions Limited, a subsidiary company in which the company holds 56% stake, registered a consolidated revenue of 3,442 crores during the quarter against 2,753 crores in the corresponding quarter of the previous year. Profit for exceptional items and tax for the quarter was 490 crores against 384 crores in the corresponding quarter of the previous year. For the year 31st March 2026, CG's consolidated revenue for the year was 12,418 crores against 9,909 crores in the previous year. The profit before exceptional items and tax was 1,662 crores as against 1,340 crores in the previous year. Shanti Gears Limited, a subsidiary company in the Gears business in which the company holds 70% stake, registered revenue of 135 crores during the quarter against 153 crores corresponding quarter of the previous year. Profit before exceptional items and tax for the quarter was 25 crores against 31 crores the corresponding quarter of the previous year. For the year 31st March 2026, SGL's revenue was at 519 crore as against 605 crore in the previous year. The PVIT was 107 crore against 130 crore in the previous year. So with me, I have Mr. Mukesh Awja.

Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may click on the raise hand icon from the participant tab on your screen. We will wait for a moment while the question queue assembles. Any participant who has a question may click on the raise hand icon. We'll take our first question from Joseph George of IIFL Capital. Please go ahead.

Hi, thank you. So, I have two, three points to touch upon. One is, can you help us with the underlying volume growth of the business? Because the revenue growth obviously includes the back row of the business.

Joseph, can you come again, please?

Could you help us with the volume?

Mr. George, could you just hold the mic a little closer to you and speak and repeat your question, please?

Is it better now? Yes, better. Okay. So, the first question was if we could share the underlying volume growth in the engineering business.

So it is almost in because there are no major price movements in the quarter four. So you can consider whatever the sales growth shown in the quarter four, it is in line with the volume growth.

Thank you. The second question was, you know, given the challenging macro environment, how are you seeing demand and volume growth, et cetera, in the early part of, say, 1Q F527, because a lot of OEMs and businesses are hinting at challenges on growth, as well as on the cost side and pressure on margins, et cetera. So we can give some indication of how things are on the ground, both in terms of volume growth, as well as in terms of impost pressure.

So, Joseph, as of now, we see volume growth are still on the stronger side. So, we see the growth is still bullish. But like you said that there is a challenge on the commodity price increases along with the macro environment fuel prices is a challenge in front of us. But like you are aware of, commodity price increase, we get it from our customers because we have contracts in place, which comes with sometimes a one or two quarters lag, that will be recovery. The immediate challenge is how to get the inflation on the fuel and this thing, which we have taken up with our customers. So we are hopeful through either driving some cost reduction inside and taking up with customer, which may have a little bit lag, we'll be able to cover that.

Thank you, sir. The last question that I had was on the, again, give an update on the scale-up of the railway business, which is something that we've talked about in the last, I think, two, three quarters, but we are yet to see the scale-up there, so some update.

So, Joseph, on that side, maybe there is no major update as of now. As of now, still we are at a product development stage, which we have completed. But customers where we are supplying, they have to get their product approved with the government of India on the one day Bharat coaches. So, that process is on and it is a work in progress. Hopefully, we'll be able to see some progress down the line two or three quarters from now.

All right. Thank you. That's all right.

Thank you. Before we take our next question, we'd like to remind participants to ask a question, you may click on the raise hand icon. We'll take our next question from Rushab Shah of RBSA Investment Managers. Please go ahead.

Yeah, am I audible? Yes, Rushabh, you are audible.

Yeah, thank you for the opportunity. My first question was actually on the EV side. Now that, you know, I believe the current crude price volatility would have better, you know, given a better pitch for the TCO and the EV side. So, how are we seeing the demand side on the, especially on the HCV? Is financing still an issue, you know, what is stopping us from scaling up in the HCV side?

Yeah. So, Rishabh, thanks. You are absolutely right. We are definitely seeing an upswing in the demand for the electric vehicles, especially in our heavy truck segment and also in the small commercial vehicle segment. In fact, we are sitting on a very good order book for the big trucks. Coming to the challenges, the challenges is primarily on account of deployment. And in deployment, there are two parts to it. One is financing, as you rightly said, because the average deployment is for about 50 to 100 trucks, which translates into about, you know, 100 crore plus kind of money which is required to be put by the service provider. And second is the challenges to set up the charging infrastructure for a given route. So these two are the challenges which we are working towards, and we are hopeful we will untangle that because order book is good, and we are hopeful, you know, to deploy these trucks in quarter one and quarter two.

And on the long haul side, I think we are trying to do the battery swap in that side, so what is the plan of action there and can we see significant scale up in this coming one or two years?

So, Aishabh, the situation has slightly changed, you know, with the introduction of higher capacity batteries and, you know, the fast charging, which is now available as a technology. So, one of the positives of the swap is that, you know, it takes less than 7 to 10 minutes to do a swap. The not-so-positive for swap is the huge setup cost which our swapping infrastructure requires. So, the judgment is still not out. When you look at China as a market, so there also, at some point of time, it was a swapping technology which was more prevalent. But at this point of time, the trend seems to be tilting towards higher battery capacities and a fast charging as a solution. So as far as we are concerned, we are not giving up on swap as a technology. There would be applications like ports, etc., where swapping only will work. So we are ready with our swap technology. In fact, we are working on a couple of orders in our hand for the same. But going forward, it looks like that higher battery capacity and fast charging could be the way forward for long haul.

Okay, and recently there has been a news flow that the world's largest battery maker has commercialized sodium and technology. So how does this, does this anyway change anything for us? Like sodium and really does become mainstream in the coming future. Does it anyway reduce, help us reduce the TCO?

Not immediately because, you know, the technology getting translated into a cell and then coming on to the validation and the full-fledged implementation on the vehicle is a slightly long-term process. So, maybe in times to come, yes, but immediately, no.

And just on the last question on the three-wheeler side, where are we on the three-wheeler? I think we had some issues and we had solved these issues. So, where are we on the scale-up on the three-wheeler auto side?

Yeah, so three-wheeler in quarter three of this year, in quarter two of last financial year, we had introduced an upgraded version of the super auto, which had started gaining a good market traction. And for us, one of the challenges of our scale-up was on the supply side was the body invite supplier, which we took a bold call in quarter four. Despite it being in quarter four, that we will solve this issue once and for all, which I am glad that we have done. So, we took a short-term hit. Our quarter four volume took a beating because we could only produce 50% of what we could have produced otherwise. Which took a toll on our both billing as well as retails at the dealer end. But now that issue is resolved. And I'm very confident that as we end this particular quarter, quarter one, we will be back to our normal production capacity on the supply side. Parallelly, on the demand side, the good news is that this new improved version has found a good market acceptance. And we are very confident that you will be able to see or you will be seeing a good scale-up of volumes as we move forward on three-wheeler business. Okay.

And just the last question on the medical devices front. Last, I think one year, we have been saying that we are expecting some certification and export. And I think that issue was also resolved. But we are not seeing significant scale-up in the business. So what is the reason and what is the outlook for that business? If you could please share.

So, exports, like you rightly said, the regulatory things are already over, but we had a little bit advent on Middle East business, which was also a good market, which we feel is a temporary, but we are able to scale up in the Europe, particularly, and Southeast Asian countries, but little got muted because of this war scenario.

So what is the outlook for the business for the next year? Is there anything that you can share or is the worst behind us or is it subject to the macro things? Is there anything that we can do to identify new products or an acquisition? Anything that we can do to buy growth?

So we have given a guidance, maybe even the last investor call, particularly which we are in wound care, which is basically suture business. We are confident to grow the business between the range of 15 to 20%. And coming to further acquisition, we just now completed a small transaction, which was a asset purchase for the IV cannula business. And we are going to finish even the plant approvals, whatever assets we purchase, which will be done during the quarter. And that will also start adding to the growth of TI Medical. So overall, we are still bullish about this business and we are hopeful we'll give 20% year-on-year growth in TI Medical going forward.

Can you just share the details of the acquisition or it is just under process?

It is already closed. It is a Medicura facility available at Ambala where we have done the business purchase, asset purchase, and then we have to go through the approvals of getting the plant approval, which is a work in progress, and we are hiring our own team also, which all those activities will get completed by quarter one, and quarter two, we are expecting it to start the commercial production for that.

And any tendative revenue, can you share of that company?

It is maybe, let's say, it was maybe we got at an attractive price. The company was not in operation. We are going to put it in operation. Okay. Okay. Thank you, sir. I wish you all the best. Thank you.

Thank you. Anyone who wishes to ask a question may click on the raise hand icon from the participant tab on your screen. We now move to our next question. That's from Joseph George from IIFL. Please go ahead.

Thank you. I had a couple of follow-up questions. One is, if we can give an update on the CDMO business, the manufacturing plant approvals, and when can we expect the revenue commencement. That was one. And second is, when we think about FI27 as a whole, how much do you expect CAPEX in the standalone business to be, and how much investments would go into the new venture? Cheers from our standard. Thank you.

So, like we shared, particularly CDMO business, our plant is under final commissioning, and we are going to do the commercial production from our Naidu paid facility starting next quarter. That's a part number one. Part number two, capex in our core business will be around 300 to 350 crore range. And coming to the subsidiaries based on the requirement, like we shared in the last investor meeting, some money will be required for depending on how operations are scaling up for the TICNPL, which is our EV business, and TI Medical also, we are going to invest money going forward. All put together, we have a rough cut estimate of around 300 crore going into the subsidiaries also. Thank you.

Thank you. Our next question is from Salil Desai of Marsalis Investment Managers. Please go ahead.

Thank you. My first question is, if you could share the volumes for the quarter in the electric vehicle businesses for each of the products.

We are.

Yeah.

Quarter 4, the volumes were, the big trucks, 60, 65, 87. Big trucks was, the MNHCV business was 687 numbers.

687?

No, no, 87. 87. The small commercial vehicle business was 241. The three-wheeler business was 1176, and tractor, there was no billing.

All right. Thank you. Second is, you mentioned this challenge on this body-in-white procurement. So if you can just elaborate, what was it? And now we have resolved it in the sense that you've started manufacturing it in-house, or your supply chain has stabilized?

Yes. So there was this supplier which was with us from the beginning of the business. And we were struggling with this particular supplier and is the reason we tried working out various solutions with him over a period of couple of years. But finally, we could very clearly identify that as we want to scale up our volumes to immediately to 1000 and then to 2000 plus consistently, this definitely would be one of the bottlenecks. So, and then we have taken over that particular facility of the supplier. It is very close to our existing unit of where we make our three-wheeler. And now we are running the facility and is the reason and whatever we have seen in the month of April and up till now in the month of May, we have been able to ramp up to the levels that we had targeted for it. There are still some more teething issues to be resolved. So that's the reason we are very confident that by end of this quarter, we will be able to resolve by and large this specific issue of body invite. Understood. Great.

Thank you. My next question is on, maybe Mukesh can answer this, is on the MFP segment. Now, we've seen that the engineering business last two quarters, we have seen volume growth coming back very strongly. But MFP, given that there will be some overlap in the customer base, this still remains a little sluggish. So any reasons why and what could be the outlook for next year?

So, Salil, your observation is right. MFP is going a bit slow. The reasons for that is one is the railways where maybe we are not. Get the profitability in the tender business and new product development with the private players is taking a bit of time. From our side, it is over. That's first. And second, our one of the major customers in MFPD is Hyundai, which also had a muted growth. You might have observed Hyundai as a OEM maybe has not done so well in the last financial year. But now they started doing even the production in the western part of the country, where also we have put up a facility for them. So hopefully those issues will be behind us and we'll have a better year for the MFPD in coming time.

Great, right. And this Western India capacity, is fully operational now, stabilized and running as normal, or there is still kind of some phased

expansion that is planned there? So Hyundai has just started maybe last quarter only their Western plant, and we are already servicing requirements from our facility in the Pune. Obviously, it will go through a ramp-up phase, but all those issues we feel in quarter one, ramp-up issues and some teething issues whenever we start a problem will be getting settled in current quarter.

I see, right. And this, I'm assuming you're referring to the steel tubes expansion in Pune, right?

Your question was on MFPD, so I'm talking low frames for Hyundai. Right, right, right. Understood.

And how about the capacity for steel tubes? Is that now fully stable?

So, whatever facility expansion we are doing, maybe let's say I think it was everything in our favor. CRSS plant in Nasik is ramping up and hopefully by end of this financial year or middle of next financial year, it will be 100% utilized. We are in the thought process what we should do for further expanding it, but we'll take a call out down the line six months. Our new facility also in the western region has touched almost about 30% capacity utilization. Hopefully, the same commentary, maybe by middle of next Spanish year, we are hopeful it will get 100% utilized. Great. Thank you so much. I'll come back in the queue.

Thank you. We'll take our next question from Sishar Saha from Saha Security. Please go ahead. Sishit, could you please unmute your microphone and ask your question? Well, there's no response from this connection. We will move to our next participant. That's a follow-up question from Rishabh Shah of RBSA Investment Managers. Please go ahead.

Yeah, thank you for the opportunity again. I just had a follow-up on the EV business. I believe in one of the earlier con-calls, we had mentioned that we are planning a significant cost reduction across all the EV platforms. So I just want to understand where are we in that journey in terms of cost reduction and localization. Because I believe that is an important point, you know, for us, you know, that enable us to scale up significantly.

Yes. So, yes, Rishabh. So, cost reduction across all our four platforms is a very important initiative. And it's a continuous and ongoing process. Although some of the recent geopolitical situation has put, you know, are the headwinds that we are facing. But I can assure you this is one of the topmost priority across all the four businesses. And various businesses have various levers to play in our journey to bomb cost reduction. When it comes to localization, happy to report that one of the parameters of localization is a PME drive scheme which was introduced by the Government of India, which incentivizes on the purchase of an electric truck only after a truck is certified to be containing some percentage of localization and component. And our Monterelectric Rhino was the first electric truck in the country to be certified under the PM eDrive scheme, which happened in quarter four. And we could deliver vehicles under this particular scheme. So that can, you know, that answers. But directionally, we are fully committed to increase the localization content across all our platforms.

And secondly, on the competitive intensity in HCV, I believe, despite the market being so small, a lot of players have already entered. So, how do we, you know, intend to, you know, stand out in the HCV? I believe we are still the market leader there. So, how do you ensure that we still, you know, grow on that market share?

Yes, you are absolutely right. Despite the market being very small, I will say across all the segments. So in truck segment, for example, there are already 11 players. And despite 11 players being there, we ended the year being a market leader with about 28% market share. Likewise, in small commercial vehicles also, there are already seven players. Despite that, in quarter four, we had a market share of 27%. So, intensity will be there. What we are or what is our USP is the end customer value proposition when he purchases the electric truck, which we feel the way we go about doing a solution selling in the market is what sets us apart from the rest of the competition. Not to talk about, I'm not undermining the, you know, the product reliability, etc., which is definitely there. But if I was to pin out, I think I will, I will iron that, I'll single that out as our approach or as our USP vis-a-vis the competition.

Okay, thank you.

Thank you. A quick reminder to our participants, if you wish to ask a question, you may click on the raise hand icon so that I can unmute your connection. That brings us to the end of the Q&A session. Ladies and gentlemen, on behalf of IIFL Capital Services Limited, that concludes today's call. Thank you for joining us, and you may now click on the leave icon to exit the meeting. Thank you for your participation.

Thank you. Thank you very much.