Murugappa Group’s engineering company Tube Investments of India (TII) is gearing up for a new growth curve with a capex of ₹200-250 crore in FY22 that will be spent on electric three-wheeler vehicle project and other expansions, and an aggressive focus on exports of bicycles.

In FY21, it incurred a capex of ₹129 crore. This fiscal it plans a capex of up to ₹250 crore, a major portion of which will be spent on electric three-wheeler manufacturing and a few expansion plans that include ramp up in China and in the domestic engineering business.

The ₹4,256-crore company plans to manufacture and sell electric three-wheelers, which has been seeing faster adoption due to low operational costs in last-mile transport in the country. It is working on launching its electric three-wheelers this fiscal.

“Progress continues on the electric vehicle project front. Obviously, things have been slightly delayed due to Covid. Our initial plan was to try and launch it in the fourth quarter of this financial year. We are still working towards those targets, but it might get pushed out because we have had several delays due to Covid in this last quarter,” Vellayan Subbiah, Managing Director, Tube Investments of India, said during the Q4FY21 earnings call.

This is the second entry by TII into the electric vehicle segment. A little over a decade ago, it entered the electric scooter segment. After an encouraging response in the initial months, volumes stagnated in the following years due to poor acceptance and withdrawal of government subsidy then. The company had to abandon the business. This time it is keen on making its EV story a successful one in view of better ecosystem and strong government support.

Bicycle business

In the bicycle business, the company will focus on four key areas — increasing domestic market share, product mix, aggressive push on exports and new products and categories. “We are looking at a far more concerted and aggressive focus than what we have done in the past. We believe that will traditionally give us good growth opportunities and balance the vagaries of domestic growth,” said KK Paul, President-Cycles Division, TII.

The company has embarked on multi-pronged initiatives as part of the above strategy. These include realignment of cost structure and supply chain, building capabilities of people, a structure for export business with a long-term growth plan, removal of gaps and weaknesses in distribution system, brand rationalisation and stronger focus on digital sales.

Overall, TII sees a good potential on the export front. Several companies in the US do not want 100 per cent dependence on Chinese supply chain and TII sees that as a definite advantage. Given the growing opportunity, the company’s export revenue is expected to move northwards.