Tube Investments posts 5-fold rise in net profit at Rs 725 crore

The company sold 14% shareholding in Cholamandalam MS General Insurance for Rs 883 crore to JV partner

Tube Investments of India Ltd has posted a net profit of Rs 725.55 crore during the quarter ended March 31, 2016, as compared to Rs 147.52 crore registered during the same quarter of previous fiscal year. Total income from operations stood at Rs 1,710.76 crore during the quarter, as against Rs 2,391.80 crore during the corresponding quarter of previous year, a decline of 28 per cent.

The company said that during the quarter, it has sold 4,18,32,798 equity shares of face value Rs 10 each representing 14 per cent shareholding in Cholamandalam MS General Insurance Company (CMSGICL) to its joint venture partner, Mitsui Sumitomo Insurance Company Limited, Japan (MS) for a consideration of Rs 883 Crore and the excess of the sale consideration over the average carrying amount of the Company's investment in the insurance join venture aggregating Rs 821 crore is recognised as a gain in the standalone financial statements.

The excess of the sale consideration over the proportionate reduction in the Company's share of net assets and goodwill in CMSGICL aggregating Rs 762 crore. is recognised as a gain in the consolidated financial statements, it added.

The general insurance subsidiary of the Company registered a growth of 30 per cent in Gross Written Premium during the year at Rs 2,466 crore as against Rs 1,896 crore and the Profit after Tax (PAT) for the year was at Rs 148 crore as against Rs 137 crore in the previous year.