Tube Investments of India Limited (TII), a part of ₹41,713 crore Murugappa Group, is planning to create six more divisions to protect itself from the cyclical nature of the auto sector as part of its long-term strategy.
The long-term objective is to build 10 business platforms over time, each of which can seamlessly have multiple divisions and seamlessly focus on their line of business, said Vellayan Subbaiah, MD.
“We’re also working with some advisors in terms of really identifying opportunity areas, and that helps us to basically identify what we see as areas with the greatest potential.”
Currently, TII has four platforms, namely engineering, metal products, mobility solutions and other businesses. Over time, it plans to add six more platforms, he said.
For the current financial year, TII proposes to incur a capital expenditure of ₹200-₹250 crore. TI-1 (core business) is seeing growth of 6%-10%. It is starting its lean initiative next month.
“We need to kind of look at the next level of opportunity in terms of improving margins across core businesses. That is step number one. So that’s what’s going to turn the cash off. It will be used for TI-2 and TI-3.
“That’s why basically we’re seeding TI-2 and TI-3, each of which will then become a scalable engine in its own right. The idea with TI-2 is to build these new platforms, but these platforms are not like that. who now generate revenue or the bottom line for us.”
“We are investing in platforms that are 5 to 7 years down the line, this can keep our compounding rate at the same level. TI-3 will be way too kinky. We will continue to look for opportunities there,” he said.
During the third quarter of last year, TII planned a three-engine model of growth with the TI-1 as the core business, TI-2 new step-out and frontier businesses such as optic lenses and EV tricycles and the TI-3 inorganic development was involved. takeover
On EV three-wheelers, he said that it will be launched during the last quarter of the financial year. “But due to COVID-19, it may be delayed by another quarter. We may launch first in South India and then across the country. We have not decided yet,” he said.
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