Tube Investments (TUBE.BO, Buy, PT Rs 200, 42% upside) UBS: India Mid-Caps TOP PICKS - September 2011

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• Diversified company catering to auto/eng/infra/power/
consumption
• Market leader in most of its businesses
- TI and Hero 75% of market, 50% market share in ‘specials’
- 50% market share for precision tubes
- 64% market share for car doorframes
• New products – super-critical boiler tubes, e-scooters
• Strong earnings growth - 23% EPS CAGR over FY11-13E.
• Adjusted for investments ROCE for FY12E attractive at 23%,
Bicycles +70% ROCE
• Holdings in Cholamandalam (59%) and Mitsui JV in the
general insurance business (74%)
• Market Cap US$0.63bn, ADV
Promoter 51%
• Valuation: SOTP, 6-7x EV/EBITDA and 50% holding company
discount

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