Chennai: Murugappa Group’s engineering flagship, Tube Investments of India (TII), which operates the group’s electric mobility business through its subsidiary, TI Clean Mobility (TICM), expects its electric truck business to reach EBITDA break-even by Q4 FY27, while two other businesses are expected to break even by Q4 FY28. The fourth business is still at a relatively nascent stage.“We need to achieve scale in each business, although the required scale will differ from one segment to another,” the management of TII said during the Q2 FY27 earnings call. At the organisational level, TICM’s first objective is to achieve EBITDA break-even, followed by profitability at the net profit level.Rising battery cell prices, rupee depreciation and higher commodity costs have pushed up the bill of materials (BOM) across TICM’s four businesses, putting pressure on profitability.Amid intensifying competition and rising input costs, the company will focus on five key priorities to drive growth and improve profitability in its electric mobility business.Reducing BOM costs, strengthening service and after-sales support, identifying profitable end-use applications and launching products suited to market requirements will be central to its strategy.The company is considering selective price increases and better realisations on a deal-by-deal basis, while stepping up efforts to reduce component costs. It is also exploring longer-term procurement arrangements and supply contracts to manage input costs.Despite stiff competition, TICM has established a relatively strong position in two of its four electric vehicle segments — trucks and small commercial vehicles (SCVs) — with a market share of around 25-26% in each, the management said. Its share of electric tractor registrations was also around 25% in H1 FY27, based on VAHAN data.However, the company needs to strengthen its position in electric three-wheelers, where its market share in both passenger and cargo vehicles remains in the low single digits.During Q2 FY27, TICM sold 311 electric trucks, 2,242 electric three-wheelers, 483 electric SCVs and 50 electric tractors. The corresponding volumes in the previous quarter were 86, 1,924, 347 and 22 units, respectively.The management reiterated its target of generating Rs 1,000 crore in revenue from its EV business by 2030. In H1 FY27, the business’s combined revenue more than doubled to Rs 715 crore from Rs 313 crore in the year-ago period.In Q2, TI invested Rs 250 crore in its EV business through compulsorily convertible preference shares (CCPS). TICM has cash reserves of around Rs 315 crore, which the management said would be sufficient to meet its funding requirements for FY27. The need for additional funding in FY28 will be decided later.
