Shares of Tube Investments of India rose more than 6% on May 16, with solid quarterly results prompting investors to buy the stock.

Shares of the Murugappa Group-owned company were trading at Rs 2,798.75 at 11:18 am, up 5.8% on the BSE.

According to Motilal Oswal Financial Services, the stock is trading at 30.2 times its FY24 EPS and 24.9 times its FY25 EPS. The brokerage has a “buy” recommendation on the share price with a target price of Rs 2,645.

The company posted consolidated net sales of Rs 3,778.24 crore in the March quarter, up 10.64% year-on-year. Revenue growth would have been higher were it not for weaker-than-expected growth in engineering, which accounts for 63% of total revenue, and a sharp decline in mobile.

Net profit for the quarter rose 74% year-on-year to Rs 311.84 crore. In addition, the board has approved long-term borrowing of up to Rs 300 crore in FY24 through term loans or privately placed NCDs to meet the company’s funding requirements.

Commenting on the financial results, Arun Murugappan, Chairman of Tube Investments India, said: “The bicycle industry continues to be impacted by shrinking demand and our bicycle business is committed to reducing costs and improving operational efficiencies through improvements. Capabilities were strong. Our subsidiaries, CG Power and Industrial Solutions Ltd and Shanthi Gears Ltd performed strongly and delivered strong results across all divisions.