Murugappa group company Tube Investments of India has posted a 48 per cent year-on-year growth in first quarter net profit at Rs 60.02 crore, primarily boosted by the engineering and metal formed products business. Net sales for the quarter ended June 30, 2011 rose 22 per cent to Rs 869 crore.

While engineering business grew 32 per cent (Rs 360 crore) and metal formed products clocked a 38 per cent rise in revenues (Rs 233 crore), the bicycles business reported a lower growth at 4 per cent (Rs 318 crore).

The low growth in bicycles was due to slowdown in demand in the initial months of the quarter, said Mr L. Ramkumar, Managing Director. Sale of electric scooters was lower in the quarter but the company hopes that with the government subsidies for electric products, the segment will pick up.

Higher productivity, efficient use of capacities and good volumes in engineering and metals formed businesses helped improve operating profit during the quarter, he said.

Investment plans

The company will invest around Rs 300 crore on Greenfield facilities for tubes in Punjab and Chennai. It will also invest Rs 150 crore on a chains facility in Chennai and Rs 150 crore on a Greenfield plant in the Eastern region for cycles (Orissa or Bihar). Investments will be funded through debt and internal accruals. Last week, the company had obtained debentures worth Rs 100 crore.