Chennai, 28th October, 2010: The Board of Directors of Tube Investments of India Limited (TII) met today and approved the unaudited financial results for the second quarter ended 30th September, 2010.

The Company’s top line was at Rs. 721 Cr. during the quarter as against Rs.586 Cr. during the same period last year, a growth of 23%. The profit before Depreciation, interest and exceptional items, for the second quarter, was at Rs. 82 Cr. against Rs. 64 Cr. last year, representing a growth of 28%. Mr. L. Ramkumar, Managing Director said, “Higher sales in the Engineering and Metal Formed segments on the back of a strong growth in the auto sector and a steady growth in the bicycles business enabled the Company report better results”. The PAT for the quarter was at Rs 31 Cr against Rs 7 Cr during the corresponding quarter of the previous year. The PAT of the corresponding previous year was after providing for Rs 30 Cr towards diminution in value of investments.

The Cycles division’s sales to trade registered a growth of 12% in volume terms. The range of premium bikes introduced earlier is gaining acceptance. Share of revenue from the exclusive outlets and other retail formats contributed one fourth of the total revenue for this business. The division also embarked on a rural retailing format and 8 stores were opened under this format.

In the tubes business, the overall volumes improved by 18% while that of the Cold Drawn Welded tubes grew by 22%. Tubular components continued to perform well and recorded a 36% growth. The division continues to maintain its focus on improving operating efficiencies to maintain its profitability.

Riding on the continued auto industry growth, the Metal Formed Products business performed well with the sale of car doorframe business registering a 33% growth and automotive chains registering a growth of 23%. Export of chains was also significantly higher at 60% with a pickup in demand from the Latin American and European markets. The rapid growth in demand could not be serviced fully due to capacity constraints. The expansion in capacity is expected to be completed shortly and should help improve the performance in the coming quarters. Sale of sections for manufacture of wagons declined by 40% during the quarter due to the delay in release of orders by the wagon builders. Orders have since been received and volumes from this business would improve in the coming quarters.

During the quarter, Rs.14 Cr was received on the sale of 10 lakh shares of the company held by TI Share Holding Trust and the Securities Premium Account has been credited with Rs.13.22 Cr.

The Board of Directors have appointed Mr. Pradeep V Bhide as additional Director of the Company. Mr. Pradeep V Bhide retired as a Secretary, Ministry of Finance, Government of India. He has also held many senior level positions in his illustrious career with the Government of India.

Performance of Subsidiaries

Cholamandalam MS General Insurance Company Ltd reported a Gross Written Premium of Rs 231 Crores, representing a growth of 25% over the same period last year. The PAT for the quarter was at Rs 5 Cr as compared to loss of Rs. 5 Cr. in the previous year.

Cholamandalam Investment & Finance Company Ltd reported revenue of Rs.282 Cr in Q2 against Rs. 198 Cr in Q2 of the previous year, representing a growth of 42%. The growth in revenue has come mainly through higher advances in the vehicle financing segment and other security based lending businesses. The PAT for the quarter was at Rs 26 Cr as compared to Rs. 8 Cr. in the previous year.

Financere C10, the industrial chain manufacturing subsidiary company in France, has reported a year to date turnover of 20.7 Million Euro as against Euro 20.2 M in the previous year despite the not so conducive business environment in Europe. Year to date PAT was at 0.370 Million Euro as compared to 0.551 Million Euro in the previous year.

While increase in steel price and higher interest rates could have some impact, a good monsoon, continued growth in the automotive sector and higher consumer demand, especially in the upcoming festive season, should help the company sustain the good performance in the coming quarters as well.

About Tube Investments of India

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. In the recent times, the Company has introduced E- Scooters.

About Murugappa Group

Founded in 1900, the Rs.13617 Crores (USD 3.03 billion) Murugappa Group is one of India’s leading business conglomerates. The Group has 29 businesses including seven listed companies actively traded in NSE & BSE. Headquartered in Chennai, the major companies of the Group include Carborundum Universal Ltd., Cholamandalam Investment and Finance Company Ltd., Cholamandalam MS General Insurance Company Ltd, Coromandel International Ltd, Coromandel Engineering Company Ltd, EID Parry (India) Ltd, Parry Agro Industries Ltd, Tube Investments of India Ltd and Wendt (India) Ltd.

Market leaders in served segments including Abrasives, Auto Components, Cycles, Sugar, Farm Inputs, Fertilizers, Plantations, Construction, Bio-products and Nutraceuticals, the Group has forged strong joint venture alliances with leading international companies like Mitsui Sumitomo, Foskor, Cargill, Groupe Chimique Tunisien, Winterthur Technology Group and Morgan Crucible. The Group has a wide geographical presence panning 13 states in India and 5 continents.

Renowned brands like BSA, Hercules, Ballmaster, Ajax, Parry’s, Gromor and Paramfos are from the Murugappa stable.

The organization fosters an environment of professionalism and has a workforce of over 32,000 employees.