During Wednesday’s trading session, the shares of one of the largest recyclers of End of Life Tyres (ELT) in Asia surged nearly 1.8 percent to Rs. 1,744 on BSE, after the company announced entering into a Joint Venture Agreement in Sou th Africa.
With a market capitalisation of Rs. 2,901.7 crores, the shares of Tinna Rubber and Infrastructure Limited opened in the green at Rs. 1743.95, as against its previous closing price of Rs. 1,713.9.
What’s the News:
According to the latest regulatory filings with the stock exchanges, Tinna Rubber signed a Joint Venture Agreement with Lionshare Holdings Ltd and Mbodla Investments Ltd, both based in Johannesburg, South Africa.
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Under this partnership, Lionshare Holdings will serve as the joint venture partner, while Mbodla Investments will be the joint venture company (JVC).
The primary objective of this agreement is to acquire and recycle used tyres and recycle them either in India and/or to commence a recycling plant in South Africa, focusing on the development and management of a tyre recycling venture in South Africa.
Additionally, the venture will engage in the manufacturing and export of used tyres/crumb rubber, and related products.
The total proposed investment for the JVC amounts to up to Rs. 6 crores in one or more tranches. Of this, Tinna Rubber will contribute 49 percent, or ~Rs. 2.94 crores, while Lionshare Holdings will provide the remaining 51 percent, or about Rs. 3.06 crores, in the JVC.
This investment is subject to further approval from the Board and Shareholders, as well as any relevant regulatory or statutory authorities.
Financials:
The company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 70 percent from Rs. 80 crores in Q1 FY24 to Rs. 136 crores in Q1 FY25.
Similarly, its net profit increased during the same period from Rs. 7 crores to Rs. 16 crores, indicating a rise of nearly 128.6 percent YoY.
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On a year-on-year basis, the Earnings Before Interest, Taxes, Depreciation, and Amortisation, or EBITDA increased from Rs. 17.7 crores in Q1 FY24 to Rs. 24.7 crores in Q1 FY25, registering a growth of 39.5 percent.
In terms of return ratios, Tinna Rubber has reported a return on equity (RoE) of 36 percent, and a return on capital employed (RoCE) of 32.6 percent, while the company’s Earnings Per Share (EPS) stands at Rs. 29.
In addition, the company has maintained better margins over the years. In FY24, the company reported a net profit margin of 10.49 percent and an operating margin of 15.84 percent.
Shareholding Pattern:
As per the latest shareholding pattern, the Promoters hold a 72.65 percent stake in the company, Foreign Institutional Investors (FII) hold a 0.79 percent stake, while Retail Investors hold a 26.56 percent stake in Tinna Rubber.
As of June 2024 shareholding data available with the BSE, ace investor Dolly Khanna holds nearly 1.76 lakhs equity shares or equivalent to a 1.03 percent stake in the company.
Stock Performance
In the previous six months, the stock has delivered multibagger returns of nearly 155.8 percent, while around 306.2 percent in the last one year. So far in 2024, it has given about 196 percent of multibagger returns.
About the Company:
Founded in 1977, Tinna Rubber & Infrastructure Limited is primarily engaged in the recycling of waste tyres/end-of-life tyres (ELT) and the manufacturing of value-added products.
The company manufactures crumb rubber, crumb rubber modifier (CRM), crumb rubber modified bitumen (CRMB), polymer modified bitumen (PMB), bitumen emulsion, reclaimed rubber/ ultrafine crumb rubber compound, cut wire shots, polymer composites etc.
The products are primarily used for making/repairing roads, tyres and the auto parts industry.
The company is the first to market and the largest player for Rubberised Bitumen (CRMB) in India. It is also the largest supplier of Micronized Rubber Powder to the tyre & conveyor belt Industry in India and holds the position of the largest manufacturer of Crumb Rubber and Crumb Rubber Modifier (CRM) in the country.
Written by Shivani Singh
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