Financial results of Tube Investments of India Limited

Chennai, 31st July 2007: The Board of Directors of Tube Investments of India Limited (TII) met today and approved the un-audited financial results for the first quarter ended 30th June, 2007.

In Q1, the sales were Rs.472.79 crore, as against Rs.413.55 crore for the same period last year. The net profit for the quarter was at Rs.14.09 crore. The net profit for the corresponding quarter in the previous year was Rs. 89.46 crore, which included Rs. 71.30 crore towards profit on sale of long term investments.

Despite the downturn in the 2-wheeler industry, the off-take of tubes was marginally higher compared to the corresponding quarter of the previous year. However, the margins were low on account of change in product-mix and non-absorption of increase in input cost by key customers. The export orders for precision tubes have been encouraging, but the significant appreciation of the Rupee against the dollar is a matter of concern.

The tube manufacturing facility being established by Tubular Precision Products (Suzhou) Co. Limited, a wholly owned subsidiary, near Suzhou in China is nearing completion. The commissioning of the plant is expected to take place in this quarter.

The sale of automotive chains to the OEMs witnessed a downturn in line with the performance of the 2-wheeler industry during the first quarter. However, the sale of industrial chains improved significantly, both in the domestic and export market. The sale of car door frames was marginally lower on account of lower sales of older models of cars of our customers. The door frame sale of the new models is expected to pick up in the forthcoming quarters. The Company is confident that the revenue stream from the new products would stabilise later this financial year.

The sale of standard as well as special bicycles improved significantly. In view of the brand equity enjoyed by the Company in the market place, the Company was able to improve on its margins despite stiff competition. The focus in the bicycle business continued to be on restructuring the distribution network. The initiatives towards rationalisation of dealer network and establishment of new dedicated outlets under the style "BSA Go" enabled us to perform better.

About Tube Investments of India Ltd
Tube Investments of India consists of TI Cycles of India, Tube Products of India, TI Metal Forming and TIDC India. 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 USD $2 billion (Rs.8500 crore) Murugappa Group is India's leading business conglomerate. Market leaders in diverse areas of business including 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 organisation fosters an environment of professionalism and has a workforce of over 28,000 employees.

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.

For further information, please contact:
K Balasubramanian
Chief Financial Officer
Tube Investments of India Ltd
Tel: 044 - 42110505 / 98402 96153
Email: BalasubramanianK@tii.murugappa.com

Chandrika Raman
Asst. General Manager-Group Corporate Communications - Murugappa Group
Tel: 044 2530 6535 / 98400 71172
Email: chandrikaR@corp.murugappa.com

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