Comments
Tube Investments of India has decided to liquidate its wholly-owned subsidiary in China, TICI Motors (Wuxi) Company Ltd.
The subsidiary was set up in 2010 to source bicycle parts. Given the high exchange rate and increase in customs duty (announced in last year’s Budget), it is not a valid business reason anymore to continue with the subsidiary, said L. Ramkumar, Managing Director.
“Most parts are being indigenously manufactured now. Imports have come down significantly.”
The liquidation of this subsidiary has impacted the third quarter profit. Tube Investments has posted a 72 per cent drop in third quarter net profit at Rs 7.49 crore, from Rs 27.17 crore in the corresponding quarter last year.
Total income (standalone) fell 13 per cent to Rs 764.97 crore (Rs 879.22 crore).
The profit for the quarter is after considering provision for diminution in value of investments in TICI Motors (Wuxi), said the company in a release.
Ramkumar said, “The revenue drop was across all segments.
“The bicycles sales were affected by sluggish consumer demand while the drop in volumes in auto sector significantly impacted the turnover of the other businesses.
“The margins were under pressure due to volume drop and higher power and fuel costs that could not be passed on to the customers. The company is continuing its tight control on all costs and working capital.”
Units’ performance
The bicycle division’s revenue for the quarter was down by 23 per cent over the same quarter last financial year due to lower trade and institution volumes.
The engineering division’s revenue dropped by seven per cent.
The motorcycle and commercial vehicle segment declined by two per cent and 14 per cent, respectively, thereby affecting the demand for tubes and cold rolled steel strips.
However, tubular components grew eight per cent due to continued focus on value-addition, said the company. During the quarter, metal formed products division’s revenue dropped by two per cent.
The company has declared an interim dividend of Rs 1.50 per equity share of Rs 2 each for the financial year ending March 31, 2013.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.