Tube Investments of India Ltd., the flagship company of Murugappa Group, is planning to reduce its dependency on the auto sector as it affects topline growth due to its cyclical nature, said a top executive.

“Over a three-to five-year time-frame, there is a lot of opportunity for TII in the present mix of business and some of the businesses that we intend to get TII into in the future,” managing director A. Vellayan Subbiah said. “Growth will have to come from both organic and potentially inorganic means over that time period,” he added.

In a communication to shareholders, he said: “We are focusing on the set of businesses that should hopefully reduce our dependence on the auto sector as its cyclicality affects performance year-to-year in terms of topline growth,” he added.

TII is a leading manufacturer of products for major industries such as automotive, railway, construction, mining and agriculture.

Mr. Subbiah said TII would focus on three streams of opportunities — growth in existing product portfolio driven by new opportunities in scooters and the shift to BS-VI norms, innovative product lines for new markets, and growth from large diameter tubular products. Mr. Subbiah said that TII foresaw a major opportunity in the two-wheeler segment, with the country transitioning from BS-IV to BS-VI emission norms. Some of the new motorcycles and scooters will have to mandatorily move to telescopic front fork systems. This will provide a major opportunity for growth in the tubular front fork segment, he added.

As part of the future growth strategy, TII expanded the capacity at its Rajpura plant to address demand density, enable customer proximity and provide better geographical balance.

Regarding the metal formed products, he said that a sizeable business came from doorframes for passenger vehicles of major auto manufacturers. Despite the fall in orders due to the slowdown, the future augurs well.

After making a strategic exit from insitutional business, TII’s bicycle vertical is exploring opportunities in exports and in the fitness, spares and accessory space.

TII chairman, M.M. Murugappan said: “As we brace ourselves to face the headwinds of an economic slowdown of a mammoth scale, we need to reinvent new methods, build new competencies to stay resilient.”

“An agility to adapt to a changing environment and embrace new technologies has always been TII’s main forte. The company is focusing on its inherent strength and strong business fundamentals to build a resilient edge,” Mr. Murugappan said.

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