Investor Presentation December 2016 Stock Codes: BSE: 504973 NSE: TUBEINVEST Bloomberg: TI IN / TI IB Reuters: TUBE.NS / TUBE.BO CIN: L35921TN1949PLC002905 Tube Investments of India Limited 1
Index Contents Table of Contents Page # Corporate Profile 3 Manufacturing Businesses Cycles and Accessories 20 • Engineering 32 • Metal formed products 42 • Gears and Gear Products – Shanthi Gears Limited 60 • Financial Service Businesses Cholamandalam Investment and Finance Company Limited 69 • Cholamandalam MS General Insurance Company Limited 70 • 2
Murugappa Group and Philosophy Market Company Name Description Gross Sales Share Capitalisation Cholamandalam Investment and Finance Company Limited is a DBG Non Banking Finance Company and one of the leading financial ₹ 183,640 Mn. 2% CEC, 0% provider for vehicle finance, business finance, home equity loans, (USD 2,757 mn) stock broking & distribution of financial products Chola MS Tube Investments of India Limited offers wide range of 8% engineering products such as Steel Tubes, Chains, Car door CIFCL ₹ 110,210 Mn. Coroman frames, Fitness equipment and Cycles 14% (USD 1,654 mn) del, 39% CUMI Coromandel International Limited is the second largest phosphatic 7% fertilizer company in India ₹ 69,690 Mn. TII (USD 1,046 mn) EID 15% 13% EID Parry (India) Limited, one of the largest player in the market, offering wide range of agro products such as sugar, microalgal ₹ 43,110 Mn. health supplements and bio products (USD 647 mn) FY 2015-16 EBITDA Share Carborandum Universal Limited is a pioneer in coated and bonded abrasives, super refractories, electro mineral and industrial ₹ 51,010 Mn. DBG ceramics. The Company currently has presence in Australia, South (USD 766 mn) 3% CEC Africa, Russia, Canada and Middle East 0% Cholamandalam MS General Insurance Company Limited is a JV of Murugappa Group with Mitsui Sumitomo Insurance Group of Chola Unlisted Japan, (5th largest insurance group across the globe) MS, 8% Coroman del 28% Note: Market data as on 30 th September 2016. Source: BSE Sensex and Conversion Rate of 1USD = CIFCL Rs.66.62 as on 30 th September 2016 Source: RBI 30% EID 6% TII CUMI 14% 12% The fundamental principle of economic activity is that no man you transact with will lose; then you shall not. 3 FY 2015-16 - Arthashastra
TII Milestones • TI Cycles setup with BSA and Hercules 1949 Brands • Entered Precision tubes with 1955 incorporation of Tube Products of India • Entered Chains business with 1960 incorporation of TI Diamond Chains Limited 1965 • TI Metal Forming setup • Promoted Cholamandalam 1978 Investment and Finance Company Ltd • Indigenously manufactured 100 CC bike 1985 chain 4
TII Milestones • Promoted Cholamandalam MS General 2001 Insurance along with JV Partner Mitsui Sumitomo Insurance , Japan 2010 • Acquired SEDIS, France 2012 • Acquired Shanthi Gears Ltd, a listed Company • Entered into Large Dia Tube manufacturing 2014 • Promoted TI Tsubamex Pvt Ltd along with JV Partner Tsubamex Company , Japan • TI sold 14% stake in Cholamandalam MS General Insurance Company to JV Partner, Mitsui 2016 Sumitomo Insurance • Board approves Demerger proposal to segregate 5 manufacturing and financial service businesses
List of Subsidiaries | Joint Ventures | Associates figures in ₹ Mn. FY 2015-16 % Company Nature of Business Total Shareholding PAT income Cholamandalam MS General Insurance General Insurance 60% 20,172 1,480 Company Limited (CMSGICL) Business Financiere C10 SAS (FC 10) Manufacturing of Chains 100% 2,342 2 Cholamandalam Investment and Finance Financial Services 46.2% 42,138 5,747 Company Limited (CIFCL) Shanthi Gears Limited (SGL) Manufacturing of Gears 70.1% 1,819 175 Cholamandalam MS Risk Services Limited Risk services 49.5% 313 20 (CMSRSL) Design and TI Tsubamex Private Limited (TTPL) 75% 2 (34) Manufacturing of Dies TI Financial Holdings Limited (TIFHL) - 100% - - 6
Corporate Overview Manufacturing Businesses Key Financials (TII Consolidated) – I GAAP • Engineering Segment (Tubes, Value Added Cold ₹ Mn. 2015-16* 2014-15 Rolled Steel Strips & Tubular Components) Revenue 79,912 97,221 • Cycles and Accessories (Bicycles & Fitness EBITDA 9,276 12,589 Products) PBIT 7,854 11,117 PBT (Before Exceptional Items) 6,476 9,692 • Metal Formed Products (Chains for Automobile Exceptional Items 7,266 340 sector & Industrial applications, Doorframe & PBT (After Exceptional Items) 13,742 10,033 Channels for Passenger Cars) Net Profit 10,389 4,244 • Gears and Gear Products (Investment in Shanthi *Revenue, EBITDA and PBIT of FY 2015-16 includes Gears Limited – Industrial Gears) CIFCL financials upto Aug ’ 15 only as CIFCL ceased to be a subsidiary w.e.f. 2 nd September, 2015. However, • Others (Investment in TI Tsubamex Private Net Profit includes full year proportionate Net Profit of CIFCL. Limited – Designing & Manufacturing of Dies) TII Standalone – As per IND AS • 25 Manufacturing Locations and Suppliers to all ₹ Mn. H1 2016-17 H1 2015-16 Growth major automotive OEM’s or Tier 2/3 Suppliers Revenue 22,078 21,141 4% Investments in Financial Services EBITDA 2,044 1,772 15% PBIT 1,758 1,343 31% Cholamandalam Finance (46.2%) • Net Profit 962 432 123% Cholamandalam MS Insurance (60%) • 7 Cholamandalam MS Risk Services (49.5%) •
Leadership Position in India- TII Standalone Largest Supplier of Precision Second largest bicycle Steel Tubes (CDW) producer in India Leader in Chains and Fine Preferred supplier for roll- blanked components formed door frames 8
Share Price and Shareholding Pattern Shareholding Pattern 100% 25.5% 25.5% 25.4% 24.9% 24.7% 80% 11.7% 11.1% 12.0% 13.1% 12.1% 60% 14.0% 14.7% 14.2% 13.6% 13.4% 40% 48.8% 48.8% 48.8% 48.8% 48.8% 20% 0% Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Promoter FII DII Others Share Price Movement 30 th Sep ’16: ₹ 590.55 700 600 500 400 300 200 100 0 30-Sep-10 31-Dec-10 31-Mar-11 30-Jun-11 30-Sep-11 31-Dec-11 31-Mar-12 30-Jun-12 30-Sep-12 31-Dec-12 31-Mar-13 30-Jun-13 30-Sep-13 31-Dec-13 31-Mar-14 30-Jun-14 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Mar-16 30-Jun-16 30-Sep-16 Uninterrupted dividend history since 1954 Dividend payout policy ~25-30% of profits 9
Key Standalone Financials H1 2016-17 figures in ₹ Mn. FY H1 Particulars 2015-16 2014-15 2016-17 2015-16 Gross Sales / Income from 40,414 39,162 21,097 20,279 Operations Growth % 3% 8% 4% Total Income from Operations 42,127 40,982 22,078 21,141 Growth % 3% 8% 4% EBITDA 3,518 3,193 2,044 1,772 % to Gross Sales 8% 9% 10% 9% PBIT (before exceptional 2,757 2,595 1,758 1,343 items) % to Gross Sales 7% 7% 8% 7% Exceptional Items 7,850 340 - - PBIT (after exceptional 10,607 2,935 1,758 1,343 items) % to Gross Sales 27% 8% 8% 7% Profit Before Tax 9,253 1,552 1,345 642 % to Gross Sales 23% 4% 6% 3% Profit After Tax 7,316 1,209 962 432 % to Gross Sales 18% 3% 5% 2% 10
Performance Trends Gross Sales figures in ₹ Mn. 60,000 50,000 40,414 39,162 36,423 36,094 40,000 30,000 21,097 20,000 10,000 0 2012-13 2013-14 2014-15 2015-16 H1 2016-17 Note: Gross Sales include Excise Duty to comply with IND AS and figures has been suitably adjusted EBITDA and EBITDA% 4,000 11.0% 3,518 3,500 3,193 10.0% 3,015 2,983 9.7% 3,000 9.0% 2,500 8.7% 8.2% 8.4% 2,044 8.2% 2,000 8.0% 1,500 7.0% 1,000 6.0% 500 0 5.0% 2012-13 2013-14 2014-15 2015-16 H1 2016-17 11
Performance Trends PBIT and PBIT% (Before Exceptional Items) figures in ₹ Mn. 3,000 9.0% 2,757 2,644 2,595 2,552 8.0% 7.3% 2,500 8.3% 6.8% 7.0% 7.0% 6.6% 2,000 6.0% 1,758 5.0% 1,500 4.0% 1,000 3.0% 2.0% 500 1.0% 0 0.0% 2012-13 2013-14 2014-15 2015-16 H1 2016-17 ROCE% 20% 18% 16% 14% 15% 13% 12% 10% 5% 0% 2012-13 2013-14 2014-15 2015-16 H1 2016-17 12 Based on Average Capital Employed excluding investments in Financial Service Businesses
Performance Trends PAT figures in ₹ Mn. 7,316 10,000 6,327 1,209 1,000 367 1,040 989 941 962 842 100 2012-13 2013-14 2014-15 2015-16 H1 2016-17 PAT (Before Exceptional Items) Exceptional Item Dividend Per Share - in ₹ Face Value Per Share - ₹ 2 6 5* 5 4 3 2 2 2 2 1 0 2012-13 2013-14 2014-15 2015-16 *Includes Special Dividend of ₹ 3.50 per Share 13
Performance Trends Earnings Per Share (Basic) - in ₹ Face Value Per Share - ₹ 2 100.00 * 39.08 10.00 6.46 5.58 5.04 5.13 1.00 2012-13 2013-14 2014-15 2015-16 H1 2016-17 *Higher due to exceptional income (Net). Earnings per Share on Normal profits would be ₹ 5.28 Book Value Per Share - in ₹ Face Value Per Share - ₹ 2 120.00 108.66 107.76 100.00 80.00 70.57 66.29 63.28 60.00 40.00 20.00 0.00 2012-13 2013-14 2014-15 2015-16 H1 2016-17 14
Performance Trends Capex in ₹ Mn. 2,500 2,172 2,000 1,689 1,358 1,500 1,240 881 1,000 500 0 2012-13 2013-14 2014-15 2015-16 H1 2016-17 Total Debt/Equity 1.20 1.10 1.10 1.08 1.00 0.80 0.68 0.60 0.38 0.40 0.20 0.00 2012-13 2013-14 2014-15 2015-16 H1 2016-17 Strong Credit Rating CRISIL AA for long term and CRISIL A1+ for short term 15
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