Input cost pressures and overall market conditions have hit Tube Investments of India Ltd (TII) which posted a 23 per cent drop in first quarter net profit (year-on-year) at Rs 38.43 crore.
Total income (standalone) was up four per cent to Rs 914 crore.
M. M. Murugappan, Chairman, attributed this to the slowdown in the automobile industry.
L. Ramkumar, Managing Director, said the first quarter results reflect the volatility and turbulence in the economy. “Profits took a beating due to a significant drop in pricing of railway wagon channels, lower volumes and increasing competition.
“The margins were under pressure across all segments due to increased material cost, inflation in power and fuel costs and Rupee depreciation. We were faced by the inability to pass on the input cost increases due the market conditions,” said Ramkumar.
Tube Investment is set to make an open offer in September to the shareholders of Shanthi Gears Ltd to acquire 26 per cent stake. The offer amounts to Rs 172 crore.
The company had entered into agreement with Shanthi Gears’ promoters to acquire their stake of 44.12 per cent for Rs 292 crore.