Tube Investments of India: Can Core Profits Outpace EV Cash Burn?

Tube Investments of India Limited’s share price rose through the first half of the past six months and has given back a meaningful part of that move since. It sits above where the period began, and below where it peaked.

Tube Investments makes precision steel tubes and cold-rolled steel strips, mostly for vehicle makers, and it sells them under back-to-back steel pricing, steel cost changes are passed through to customers rather than absorbed. That Engineering division brought in ₹5,612 crore of revenue in FY2026, up 12% year on year, with profit before interest and tax of ₹689 crore. Underneath that revenue, domestic tube volumes grew 13% and cold-rolled steel strip volumes grew 28%, so the growth is more things sold, not steel prices flowing through the top line.

Two new plants sit at the centre of the next leg. The Phaltan tube plant started production in August 2025; the Nashik strips plant was 70% utilised as of the second quarter of FY2026. A new plant carries its depreciation and fixed costs from day one and fills up over years, which is why return on capital employed in this division has fallen from 73% in FY2023 to 46% in FY2026 while its margin barely moved, holding in a 12.0% to 12.5% band throughout. That is the thing to watch this quarter: revenue growth tells you the plants are filling, but the margin tells you whether they are filling at full price.

The second half of the company pulls the other way. The electric-vehicle segment, electric trucks, three-wheelers and small commercial vehicles sold under the Montra Electric brand, recorded an operating loss of ₹638.52 crore in FY2026, widening 55% from ₹411.69 crore the year before, against standalone free cash flow of ₹826 crore. The core is funding it. 

The management said in May that it hoped to deploy electric trucks in the first two quarters of this financial year after shipping 87 in the January to March quarter, and said three-wheeler production, which ran at about half capacity on a supplier problem, would be back to normal by the end of June.

A third piece changes the reported numbers again. Tube Investments holds 56.29% of CG Power, which is separately listed, grew revenue 25% to ₹12,418 crore in FY2026, and pays ₹115.24 crore a year in dividends into the parent. So the consolidated profit you will see blends a growing power business, a margin-stable tube business and a loss-making vehicle business. This quarter’s disclosure lets you look at all three separately, which is the only way the number means anything.

What To Look For

Four checkpoints, each with a line already drawn

What Could Go Right (Upside)

Four assumptions are being read here, two outside the company’s control, two resting on its own choices.

Outside The Company’s Control

• Vehicle demand holds up. Domestic tube volumes grew 13% year on year in FY2026. European electric-vehicle makers moving sourcing to India to reduce reliance on Chinese suppliers adds demand on top of that. If both hold, the new Phaltan capacity fills at the pace management guided.
• Financing and charging come together for the electric trucks. Truck deployment is gated on two things the company does not control: financing for fleet buyers taking order blocks of ₹100 crore and more, and charging infrastructure on the specific routes. If both clear, the order book management described as strong converts into shipped units.

The Company’s Own Choices

• The new plants fill without discounting. Cold-rolled steel strip volumes grew 28% in FY2026. Because steel cost is passed through, the earnings lever here is purely how full the plants are, so if utilisation rises while the 12% margin holds, almost all of that revenue converts into segment profit.
• The three-wheeler supply fix holds. Production ran at roughly half capacity in the March quarter because of a body supplier problem. Management took over that supplier’s facility and said normal capacity would return by the end of June. If it did, volumes step up in this quarter’s numbers.

What Could Go Wrong (Downside)

The same four assumptions, read from the other side.

Outside The Company’s Control

• Vehicle demand softens. Weaker two-wheeler and passenger-vehicle output would leave the new Phaltan capacity underfilled. Its depreciation and fixed costs arrive whether or not the volume does, which is what turns a demand problem into a margin problem.
• Exports stay capped. Tube exports into the United States carry a 50% effective duty under Section 232, and no relief had been indicated as of early 2026. Exports are about 17% of the division’s revenue across all markets combined, so while that duty stands, growth has to come from domestic demand.

The Company’s Own Choices

• Volume is bought with price. If the new capacity only fills at concession pricing, the margin slips below the 12% band and the utilisation gain stops converting into profit. That is the specific way this ramp can look successful on revenue and fail on earnings.
• The vehicle losses outrun the funding plan. The electric-vehicle segment lost ₹638.52 crore in FY2026, while management guided ₹300 crore into all subsidiaries combined for FY2027, down from ₹500 to ₹750 crore into the vehicle business alone, guided three months earlier. If losses stay near last year’s level, the difference has to come from outside investors or from the parent’s balance sheet.

Still Unanswered

Three things the disclosures don’t tell you.

How much does the US steel tariff actually cost this company?

Exports are around 17% of the tube division’s revenue, but that figure covers the United States, Europe and Asia-Pacific together and the US share is not broken out. No disclosure quantifies the revenue given up to the 50% duty. So the tariff is a real cap on the export lever and an unsizeable one, which is why it is not one of the four checkpoints.

How much revenue are Phaltan and Nashik actually contributing so far, and what volumes is management targeting for each in FY27?

Management has guided full utilisation timing but disclosed no facility-level revenue or volume baseline. Without that starting point, it is hard to measure how much progress each quarter’s results represent.

When does the electric-vehicle business expect to stop losing money, as a dated commitment?

Breakeven for trucks and three-wheelers was described in February 2026 as 12 to 18 months away. Three months later, the guided capital infusion was cut without the date being restated, and losses over that period widened rather than narrowed. No disclosure lets you place the year.

Why Should You Care

You have probably touched this company without knowing it, the frame of the bicycle you learned to ride, the tubes inside the two-wheeler you commute on, and now the electric three-wheelers moving goods through Indian cities. The tube division alone generated ₹5,612 crore of revenue in FY2026, the scale against which everything on these cards gets measured.