Detailed Narrative
Q1 FY26 Financial Performance Overview
Tube Investments reported a standalone revenue of ₹2,007 crores for Q1 FY26, a 2.4% increase from ₹1,960 crores in the previous year. Standalone PBT grew by 6.7% to ₹222 crores from ₹208 crores. However, the standalone Return on Invested Capital (ROIC) decreased to 39% from 47% YoY. Consolidated revenue for the quarter was ₹5,309 crores, up from ₹4,578 crores, but consolidated PBT (before specific adjustments) saw a slight decline to ₹449 crores from ₹470 crores.
EV Business Performance and Strategy
The EV division's Q1 FY26 volumes included 45 e-trucks, 1,668 three-wheelers, 44 small commercial vehicles, and 34 e-tractors. Management indicated that achieving operational breakeven for the EV business this year is unlikely due to lower-than-expected volumes. To address competition and drive growth, the company plans a product refresh for three-wheelers in Q2 FY26, entry into new sub-segments (like L5N cargo and L3 E-RIC), and expanding its dealership network to 125 by year-end. The company also expects to apply for PM e-drive eligibility in Q2 FY26.
Core Business Performance (Engineering & Metal Formed)
The Engineering division recorded a revenue of ₹1,298 crores, a 2.6% increase YoY, with PBIT at ₹153 crores. Volume growth for this segment was approximately 10%. The Metal Formed Products division generated ₹366 crores in revenue, up 2.2% YoY, with PBIT of ₹37 crores, and volume growth of 3-4%. Management noted that steel price increases have impacted margins, but full recovery from customers is expected within the next 1-2 quarters.
Capital Allocation and Growth Initiatives
The planned standalone capital expenditure for FY26 is ₹350 crores, allocated across the engineering and metal formed divisions. The battery packaging plant in Manesar is expected to be operational by the end of FY26, which is crucial for cost reduction and indigenization. The Nasik plant has commenced commercial production, with ramp-up expected by next year. The company is also focusing on making battery swapping available for trucks by the end of the year to facilitate fleet operations.
Subsidiary Performance
CG Power and Industrial Solutions, in which Tube Investments holds a 58% stake, reported a revenue of ₹2,878 crores and a PBT of ₹364 crores for Q1 FY26, showing an 8.3% YoY PBT growth. Shanti Gears Limited, with a 70.46% stake, posted a revenue of ₹135 crores and a PBT of ₹31 crores, reflecting a 6.9% YoY PBT growth. The CDMO business is progressing with validation batches for its first DMF, expected in the next two quarters.
Market and Macroeconomic Outlook
Management expressed confidence in achieving double-digit growth for the standalone business in the future. However, the export segment, currently at 15% of TI's revenue, faces uncertainty due to potential US tariffs, making the target of 25% challenging in the current macro environment. The company is devising strategies to mitigate any headwinds in exports. Regarding lithium-ion prices, management expects any increases to be passed on across the industry due to it being a major cost component.