LML, India's second largest manufacturer, has recorded a loss of Rs 22.3 m in 3QFY2000. The company has been affected adversely from the structural shift in the two-wheeler segment towards motorcycles, away from scooters.
The 5.6% drop in sales could not offset the 0.9% fall in operating expenditure. Operating profit fell by over 60%. The reduction in interest burden (down 8.0%) and depreciation (down 6.6%) could not pull the company out of the red.
Profit before Tax
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LML plans to launch motorcycles to spread its risks more effectively. It has entered into a technical tie-up with Korean two-wheeler major - Daelim for its motorcycle venture.
In view of declining sales in the scooter segment, and added burden on margins with planned forays in motorcycles and scooterettes, analysts have flagged LML as a 'SELL'. Loss in 3QFY2000, seems to have reinforced analyst views.
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