Investing in stock market is high risk. However, there are several companies that became multibaggers in short to medium term. This midcap stock has generated 1000% returns in the last 5 years and consistently generating over 55% annualised returns in the last 1 year, 3 years and 5 years. It is an auto ancilliary midcap stock that is consistently growing in terms of revenues and margins. In fact this is the favorite stock for many mutual funds too. In this article, we would talk about Tube Investments Limited, its financial performance, positive factors, risk factors of investing in this company and share price performance in the last 1 to 5 years time frame.
Also Read: Which stocks are paying higher dividends than bank FDs?
About Tube Investments Ltd
Tube Investments of India Limited is one of India’s leading manufacturers of a wide range of products for major industries such as Automotive, Railway, Construction, Mining, Agriculture, etc.
The company’s 3 main verticals are
1) Engineering
2) Metal Formed Products and
3) Bicycles.
In line with its growth strategies, the Company has forayed into TMT bars and Truck Body Building business and is additionally exploring opportunities in optic lens and other vision systems for the Auto industry.
Financial Performance of the company
Revenue grew from Rs 5,027 Crores in FY18 to Rs 12,525 Crores in FY22. Its latest quartely result for period ending Dec-22 indicate its revenus as Rs 3,666 Crores compared to previous year quarter revenues of 3,410 Crores.
Margins grew from Rs 168 Crores in FY18 to Rs 994 Crores in FY22. Its Dec-22 quarter profits are Rs 328 Crores Vs Dec-21 profits of 390 Crores.
Its ROE is 28% and RoCE is 29.4%.
Its EPS increased from Rs 7.86 in FY18 to Rs 39 in FY22. For 9 months ended Dec-22, it earned EPS of Rs 33.3.
Positive Factors in this company
Strong revenue and margin growth in the last 5 years.
Company had strong annual EPS growth.
This company has low debt.
Book value per share is increasing in the last 2 years.
FII / FPIs have increased their stake in this company. Currently there are over 490 FII / FPI’s who are holding 26% of the company shares.
Brokers have upgraded the stock target price in the last 3 to 6 months.
Negative Factors of investing in this company
Its net cash flow is declining.
Mutual Funds have reduced their stake in the last quarter. Currently there are over 27 mutual fund schemes who are holding 10% of the company shares.
Stock is trading at 14.5 times its book value.
This stock price has corrected over 12% in the last 6 months.
How is the share price performance?
Its current market price of share is Rs 2,595. Let us look at how share price has performed in the last 5 years.
Last 3 months – minus 3% returns
Last 1 Year – 55% returns
Last 3 years – 725% returns
Last 5 years – 1014% returns
Also Read: A Smallcap stock that turned 1 Lakh to 1 Crore in 6 years
Disclaimer: This article is for educational purpose only. Investment in stocks are high risk. I keep doing research on various stocks that are outperforming, reasons behind it and post them on this platform so that investors can benefit with the analysis. Currently I do not own these shares, however might purchase them in near future. Please consult your financial advisor before investing in such stocks.
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