Heavy vehicle sales limit Telco's growth - Views on News from Equitymaster

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

  • MyStocks


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

Heavy vehicle sales limit Telco's growth

Mar 14, 2000

Tata Engineering has posted a YoY sales growth of 26% and 35% during February 2000 in light commercial vehicles and utility vehicles respectively. The heavy commercial vehicle segment grew by a modest 1.5% even as passenger car sales topped 5,392 numbers. 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 (UVs) (28% market share) and passenger cars (8% market share).

For the eleven months ended February 2000, the company’s cumulative sales growth stands at 57.8%. The main contributor to this has been the heavy vehicles segment, which has growth 44.5%. However, the LCV segment recorded a 6.9% decline in this period even as LCV sales stagnated at previous years’ levels.

The latest monthly results highlight that there has been a slowdown in the sales of heavy vehicles – both exports and domestic sales (up 3.7% YoY). However, the LCV and the UV segment seem to be picking up. The LCV segment has benefited from the trickle down effect after the surge recorded in the heavy vehicles segment. The growth in the UV segment seems to have responded to the new introductions during the year (largely in response to competition).

Indica sales continue to be robust and this should be a key-driving factor of overall growth, especially in view of the company's plans to rev up production to 10,000 cars per month shortly.

Although the monthly sales have grown by 56% (YoY) (due to base effect), there is a key concern that pertains to the slowdown in the sales of heavy vehicles – the bread and butter business of the company. However, as industrial activity picks up sales should look up.

Market view:
Given the strong CV demand, and robust Indica sales, analysts have recommended a 'LONG TERM BUY' on the stock. Concerns about the capitalisation of the Indica and its break-even still persist.

Equitymaster requests your view! Post a comment on "Heavy vehicle sales limit Telco's growth". Click here!


More Views on News

Massive Surge in the Shares of Tata Motors Today. Key Factors Favouring the Rally (Views On News)

Oct 13, 2021

Tata Motors zooms 23% after report of TPG investing Rs 75 bn in EV arm.

Tata Motors Fails to Take Advantage of Rising Demand as Chip Shortages Hurt (Views On News)

Jul 27, 2021

A global chip shortage, Covid uncertainty, and commodity inflation are likely to impact Tata Motors in the short term.

TATA MOTORS 2020-21 Annual Report Analysis (Annual Result Update)

Jul 26, 2021 | Updated on Jul 26, 2021

Here's an analysis of the annual report of TATA MOTORS for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of TATA MOTORS. Also includes updates on the valuation of TATA MOTORS.

India's Edge in Electric Vehicle Stocks podcast (Views On News)

Sep 9, 2021

India has a huge advantage in using climate friendly EV batteries.

4 Ways to Play the EV Opportunity (Views On News)

Sep 6, 2021

The EV disruption is happening faster than you think. Here's how you can ride the Indian EV megatrend.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

7 Stocks that Mutual Funds Can't get Enough of (Views On News)

Dec 1, 2021

Come hell or high water, these are the top Indian stocks which mutual funds never leave.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Dec 7, 2021 (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