Indica accelerates TELCO's losses - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Indica accelerates TELCO's losses

Jan 25, 2000

Automobile major Tata Engineering & Locomotive Company (TELCO) has posted a loss of Rs 603.4 m in 3QFY2000. However, sales turnover was a big consolation for the company as it posted a 52% leap to Rs 23.9 bn. TELCO is India's largest medium/heavy commercial vehicles (M/HCV) (65% market share in September 1999) and light commercial vehicles (LCV) (63% market share) manufacturer. It also manufactures utility vehicles (28% market share) and passenger cars (7% market share).

TELCO's finance costs declined 8.4% to Rs 993.8 m, however depreciation climbed 43.6% to Rs 985.2 m.

(Rs m) 4QFY2000 4QFY1999 Change
Net Sales 23,901.7 15,717.4 52.1%
Other Income 50.0 217.4 -77.0%
Expenditure 22,576.3 14,379.5 57.0%
Interest 993.8 1,085.2 -8.4%
Depreciation 985.2 685.9 43.6%
Profit before Tax (603.6) (215.8) 179.7%
Tax - -  
Profit after Tax/(Loss) (603.6) (215.8) 179.7%
Net profit margin (%) -2.5% -1.4%  

Indica continues to eat into the company's margins. Strong CV sales contributed to the 52% jump in TELCO's turnover, but could not offset the decline in profitability. The company failed to absorb the full commissioning costs of the Indica, and so long as it struggles to do that, profitability seems distant. However, the Indica is operating at full capacity and has even bagged some export orders for Malta, being the first private sector car manufacturer to bag an export for a European location.

TELCO is looking to break-even by the end of FY2000, but given the competitive scenario in the passenger car segment (especially the small cars) this may seem a little too optimistic.

Robust CV demand will continue to boost the company's topline (sales). December 1999 witnessed 79.7% appreciation in TELCO's M/HCV sales. As cement, steel demand continue to firm up, M/HCV sales will clock above-average growth. However, TELCO will witness a decline in margins from the M/HCV business after installing the new Cummins engines in its models, which have added to the cost.

Market view:
Analysts have flagged a 'LONG TERM BUY' on the company due to its disappointing 3QFY2000 results. Analysts are bullish on the company's improved CV performance and strong Indica sales and feel that things can only get better for the company from here on.

Equitymaster requests your view! Post a comment on "Indica accelerates TELCO's losses". Click here!

  

More Views on News

Hero MotoCorp's Manufacturing Halt and Electric Vehicle Shift (Company Info)

Apr 22, 2021

Key reasons why the stock of Hero MotoCorp is in focus today.

TATA MOTORS Announces Quarterly Results (2QFY20); Net Profit Up 117.4% (Quarterly Result Update)

Oct 29, 2019 | Updated on Oct 29, 2019

For the quarter ended September 2019, TATA MOTORS has posted a net profit of Rs 2 bn (up 117.4% YoY). Sales on the other hand came in at Rs 654 bn (down 9.3% YoY). Read on for a complete analysis of TATA MOTORS's quarterly results.

TATA MOTORS Announces Quarterly Results (1QFY20); Net Profit Down 58.4% (Quarterly Result Update)

Jul 29, 2019 | Updated on Jul 29, 2019

For the quarter ended June 2019, TATA MOTORS has posted a net profit of Rs 34 bn (down 58.4% YoY). Sales on the other hand came in at Rs 615 bn (down 8.4% YoY). Read on for a complete analysis of TATA MOTORS's quarterly results.

TATA MOTORS 2018-19 Annual Report Analysis (Annual Result Update)

Jul 5, 2019 | Updated on Jul 5, 2019

Here's an analysis of the annual report of TATA MOTORS for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of TATA MOTORS. Also includes updates on the valuation of TATA MOTORS.

More Views on News

Most Popular

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

Top 3 Nifty ETFs to Buy Now (Fast Profits Daily)

Apr 20, 2021

In this video I tell you the three Nifty ETFs I think are the best.

A Stock with 700% Return Potential Comes with Additional Payoffs (Profit Hunter)

Apr 15, 2021

Narayana Murthy was one of the first unicorn founders to get the backing of this entity...

11x Bankruptcy to Bluechip Stock: A Rare India Revival Story (Profit Hunter)

Apr 16, 2021

There is no stopping this 11-bagger stock from significant upside.

Why Did the Market Crash on Monday? (Fast Profits Daily)

Apr 13, 2021

In this video, I'll you what I think is the real reason behind yesterday's market crash.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

TATA MOTORS SHARE PRICE


Apr 22, 2021 (Close)

TRACK TATA MOTORS

  • 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

TATA MOTORS 8-QTR ANALYSIS

COMPARE TATA MOTORS WITH

MARKET STATS