Financial results of Tube Investments of India Limited

Chennai, 27 April 2007: The Board of Directors of Tube Investments of India Limited (TII) met today to approve the audited financial results for the quarter and year ended 31st March, 2007.

In Q4, the sales were Rs.468.28 Crores, as against Rs.384.20 Crores for the same period last year. The net profit for the quarter was at Rs.19.41 Crores (previous year 90.68 Crores), which includes one time income of Rs. 0.39 Crores (Previous year Rs.89.40 Crores). The Board of Directors of the Company have recommended a dividend of Rs.1.50 per equity share of face value Rs.2/-, for the year.

The turnover for the year was Rs. 1761.84 Cr., which is 11% higher than that of the previous year. The increase came through higher volumes in all businesses. However, due to the increase in the cost of inputs and reduction in prices of certain products this did not translate into a corresponding increase in profits.. The profit before tax (PBT) for the year was at Rs.195.31 crores as against a PBT of Rs. 245.63 crores in the year 2005-06. The profit for the year also includes a one time income of Rs. 71.7 crores mainly on account of the sale of a part of the long term investments (Previous year Rs. 110.50 crores). The Profit after tax was Rs.155.78 Cr. (previous year Rs.182.93 Cr.)

Turnover in the bicycles business crossed the Rs. 500 crore mark for the first time and touched Rs.511 crores against Rs.466 crores in the previous year, representing a growth of 9.7%. This was possible due to the higher volumes achieved in the trade segment through new retail initiative under the brand "BSA Go". During the year, a range of fitness equipment was launched under the brand "BSA Workout" and the initial feedback has been encouraging.

The engineering business grew in turnover from Rs.995 crores to Rs.1104 crores with growth in all major product lines namely strips, tubes, automotive & industrial chains and car doorframes. The supply of cold rolled formed sections for the Indian Railways commenced during the year. The performance on the export front was encouraging in industrial chains but was lower in steel strips and tubes. The domestic industry continued to be characterised by intense competition, availability of alternatives through cheaper imports, particularly in tubes, higher input cost, mainly steel which could not be passed on, even in part, to the customers. As a consequence, margins were lower and the operating profit for the year was at Rs.138 crores against Rs.155 crores last year. Aggressive cost reduction measures, reduction in rejections/wastage and improvement in yields continue to be main focus areas.

The company has plans to set up a plant at Uttarkhand to manufacture industrial and automotive chains and another plant at Pune to manufacture car doorframes. The tube plant being established by the wholly owned overseas subsidiary at Suzhou, China is expected to start commercial production from July'07.

About Tube Investments of India Ltd
Tube Investments of India consists of TI Cycles of India, Tube Products of India, TI Metal Forming (including Chains). In bicycles, TII is the second largest manufacturer with well-known brands - Hercules, BSA and Philips. TII is the market leader in precision steel tubes and roll-formed car doorframes in India. Also, being the second largest motor cycle chain manufacturer in India, TII is a major supplier to the Indian auto / auto- component industry.

About the Murugappa Group
Headquartered in Chennai, the Rs.7400 plus crore Murugappa Group is India's leading business conglomerate, which fosters an environment of professionalism for its strong workforce of 28,000 employees. Market leaders in diverse areas of business viz. engineering, abrasives, finance, general insurance, sanitaryware, cycles, sugar, farm inputs, fertilizers, plantations, bio products and nutraceuticals, its 29 registered companies have manufacturing facilities spread across 12 states in India.

The Group has forged strong joint venture alliances with leading international companies like Roca, Cargill, Cerdak, DBS Bank, Mitsui Sumitomo and Groupe Chimique Tunisien and has consolidated its status as one of the fastest growing diversified business houses in India.