Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Telco: 3QFY02 net loss halves - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jan 22, 2002

    Telco: 3QFY02 net loss halves

    Tata Engineering (Telco), the market leader in the commercial vehicle segment, has reported a good performance for the third quarter ended December 31, 2001. While sales have risen by 16%, a sharp expansion in margins has enabled the company to halve its net loss for 3QFY02. However, the performance is below expectations.

    (Rs m) 3QFY01 3QFY02 Change
    Net sales 15,254 17,727 16.2%
    Other Income 313 2 -99.5%
    Expenditure 14,677 16,295 11.0%
    Operating Profit (EBDIT) 577 1,431 148.0%
    Operating Profit Margin (%) 3.8% 8.1%  
    Interest 972 979 0.8%
    Depreciation 1,081 922 -14.7%
    Profit before Tax (1,163) (469) -59.7%
    Extraordinary items (51) (87)  
    Tax - -  
    Profit after Tax/(Loss) (1,214) (555) -54.3%
    Net profit margin (%) -8.0% -3.1%  

    The reasons for this sharp rise in sales are multifold. For one, after prolonged sluggishness, demand for medium and heavy commercial vehicle sales (M/HCVs) gained momentum in 3QFY02. Being the market leader in both the segments, Telco has reaped the benefit of the upturn. CV sales have gone up by 11% to 20,685 units. Thanks to the successful launch of its passenger car, 'Indica V2', sales have almost doubled in 3QFY02. Telco had outperformed all other passenger car in 'Segment B' in the last three months.

    Sales performance...
    (Nos) 3QFY01 3QFY02 % change
    Commercial vehicles 18,665 20,685 10.8%
    UVs and passenger cars 12,922 19,036 47.3%
    Exports 4,321 3,252 -24.7%
    Total volumes 35,908 42,973 19.7%
    Source: Company's website

    However, the slowdown in the global economy seems to have resulted in subdued export performance. Though passenger car division has performed extremely well, demand for utility vehicles and light commercial vehicles continue to remain sluggish. LCV and UV sales have fallen by 18% and 11% respectively in 3QFY02. Despite almost 20% rise in volumes, turnover has increased by only 16%. This indicates that competition and a weaker demand scenario have exercised a downward pressure on prices.

    Telco's cost saving initiatives and value engineering efforts have also yielded positive results. Operating margins have gone up from 4% in 3QFY01 to 8% in 3QFY02, which is higher than what we expected. Interest costs have remained at the previous years' levels but they are expected to fall notably for FY02. The company has plans to repay debt worth Rs 2 bn in the current fiscal from the rights issue proceeds. Telco raised Rs 6,720 m via a rights issue of convertible and non-convertible debentures with an option to exercise the convertible warrants of Rs 3,070 m at a future date. The issue which closed on November 9th, 2001 was fully subscribed.

    But the performance of the company is below our expectations. As against our estimated net loss of Rs 2,431 m for FY02, the company's net loss for the first nine months of the current fiscal stands at Rs 2,164 m. The stock currently trades at Rs 120 implying a price to book value of 0.9 times.



    Equitymaster requests your view! Post a comment on "Telco: 3QFY02 net loss halves". Click here!


    More Views on News

    Tata Motors Ltd: Another Disappointing Quarter, Management fails to Perform! (Quarterly Results Update - Detailed)

    Aug 14, 2017

    Tata Motors Ltd disappoints again for both India and JLR business. Management commentary indicates a slow year ahead.

    Tata Motors Ltd: Dismal Quarter, Long way to go! (Quarterly Results Update - Detailed)

    Feb 16, 2017

    Tata Motors Ltd has announced its financial results for the third quarter of the financial year 2016-17 (3QFY17).

    Maruti Suzuki Ltd: Bumpy First Quarter. GST dents Margins! (Quarterly Results Update - Detailed)

    Aug 2, 2017

    GST realted cost impacts Margins, Management expects good year ahead.

    Hero Motocorp Ltd: Riding on the Scooters Growth, Maintains Margins! (Quarterly Results Update - Detailed)

    Aug 1, 2017

    Good Recovery in the Scooters market, expects pick up in exports too.

    Bajaj Auto Limited: Recovery in Exports but Domestic Disappoints! (Quarterly Results Update - Detailed)

    Aug 1, 2017

    New Export Markets picking up, Management expects good recovery in domestic Three wheeler market.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 (Close)


    • Track your investment in TATA MOTORS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks


    Compare Company With Charts