Tube Investments of India shares surge 8% after Q1 earnings. What Motilal Oswal is saying

As per a regulatory filing on the BSE released on Friday, the company’s Q1 profit after tax declined over 5% year-on-year to Rs 158.62 crore, from Rs 168.09 crore in the corresponding quarter of the previous year. Revenue from operations stood at Rs 2,227.63 crore, as compared to Rs 1,892.48 crore in the same quarter last year.

What Motilal Oswal said

Domestic brokerage firm Motilal Oswal reiterated its Buy rating on the stock, with a target price of Rs 3,379, citing in-line earnings despite margin miss. Tube Investments India’s core business remains fundamentally strong, with the Engineering business having delivered 17% volume growth and exports growing in double digits, while MFP revenue growth improved to 11.5% during the quarter, the brokerage stated in its note.

Despite near-term margin headwinds, Tube Investments of India offers diversified revenue streams, with steady growth in the core business (~7% S/A PAT CAGR over FY26-28E) and CG Power, as well as the optionality of new businesses incubated under the TI-2 strategy, according to the brokerage.

Two of the standalone entity’s business segments, viz., Engineering and Metal Formed divisions, which contribute ~80% of its revenue, are dependent on the auto business, the brokerage stated. While the GST rate reduction has helped revive auto demand across segments, the near-term outlook for the sector has turned cautious given the potential impact of the ongoing geopolitical issues on the economy. Motilal Oswal expects the standalone business to post a steady CAGR of 8%/8%/7% in revenue/EBITDA/PAT over FY26-28.

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Management outlook

Management remains constructive on the near-term demand environment, with strong momentum visible across most vehicle categories and geographies, as per the brokerage report. Engineering volumes and exports are expected to remain healthy over the next one to two quarters, while new product development and customer relationships provide additional growth support. Margin recovery remains a key near-term catalyst, with full recovery of steel inflation and potential recovery of other input-cost inflation expected to progressively improve profitability.

Overall, the company remains focused on scaling its core businesses while investing in medical, CDMO, EV mobility, battery manufacturing, and other emerging businesses to build multiple growth engines.