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Tube Investments: Buy; PT Rs206
Cold welded tubes - The company doesn't foresee any de-growth in auto
sector and is happy with an 8-9% growth in the sector. It is planning
expansion in north in one year entailing investment of Rs3bn, as more than
40% of auto component requirements are from North. The company plans to
garner market share in this segment with increase in its capacities and its
flexibility to supply various size of products.
It is difficult for the company to pass through any increase in raw material
prices immediately but can manage if quarterly fluctuations are low. Tube's
products sell at 5-6% premium versus the competitor products. The company
remains focused in reducing the revenue contributions from auto sector
through its presence in railways, fine blanking products and others.
Cycles - The company’s strong brands with improved service will ensure its
presence in standard bicycles market. Tube entered in the specials segment
(high-end bicycles) due to rising demand and has seen strong growth in this
segment over last 2 years. Tube targets to gain strong market share in north
and east markets.
The company has capex plans of Rs5-6bn to be funded through internal
accruals and borrowings.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Tube Investments: Buy; PT Rs206
Cold welded tubes - The company doesn't foresee any de-growth in auto
sector and is happy with an 8-9% growth in the sector. It is planning
expansion in north in one year entailing investment of Rs3bn, as more than
40% of auto component requirements are from North. The company plans to
garner market share in this segment with increase in its capacities and its
flexibility to supply various size of products.
It is difficult for the company to pass through any increase in raw material
prices immediately but can manage if quarterly fluctuations are low. Tube's
products sell at 5-6% premium versus the competitor products. The company
remains focused in reducing the revenue contributions from auto sector
through its presence in railways, fine blanking products and others.
Cycles - The company’s strong brands with improved service will ensure its
presence in standard bicycles market. Tube entered in the specials segment
(high-end bicycles) due to rising demand and has seen strong growth in this
segment over last 2 years. Tube targets to gain strong market share in north
and east markets.
The company has capex plans of Rs5-6bn to be funded through internal
accruals and borrowings.
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