Tube Investments of India shares rose 7% as Motilal Oswal kept its 'Buy' rating with a target price of ₹3,379. While the company reported 17% revenue growth for the first quarter of FY27, rising steel costs and losses in the electric vehicle division weighed on profitability. Investors should track margin recovery and the progress of new business ventures.
Tube Investments of India (TIINDIA) saw its share price rise by 7% during intraday trading following a research report by Motilal Oswal, which reaffirmed a 'Buy' recommendation on the stock with a target price of ₹3,379. This market response follows the company’s first-quarter results for the 2027 fiscal year, where revenue growth remained strong despite profitability challenges.
Q1 FY27 Performance Overview
In the first quarter of the 2027 fiscal year, Tube Investments reported a 17% increase in consolidated revenue to ₹6,215 crore compared to the same period last year. However, the company’s profit after tax declined by 3% to ₹294 crore. The dip in profit was primarily due to pressure on profit margins. The standalone operating profit margin fell by 194 basis points to 10.39%. This contraction was largely driven by rising raw material costs, specifically steel, which became more expensive during the quarter. Management has indicated that they aim to recover these margins in future quarters through price adjustments.
Impact of New Ventures
The company is aggressively investing in new growth areas, including electric vehicles and semiconductors, as part of its 'TI-2' business strategy. While these segments are viewed as potential long-term growth drivers, they are currently in the investment phase and are affecting the company's overall profitability. The electric vehicle division reported a loss of ₹147 crore during the first quarter. To support these expansion plans, the company has earmarked a capital spend of ₹600 to ₹700 crore for the current fiscal year, with a significant portion allocated to the standalone business.
Investor Monitorables
The brokerage's 'Buy' rating and target price reflect a long-term confidence in the company's diversified revenue streams, despite current obstacles. Investors should watch how the company manages raw material costs, as steel price volatility remains a key risk factor for the manufacturing business. A primary point to track in future quarters will be the company’s ability to balance heavy investment in new sectors like e-mobility while improving its profit margins. Whether the company can reduce losses in its electric vehicle segment will be an important update for shareholders to monitor.