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Passenger cars boost Telco's April volumes - Views on News from Equitymaster
 
 
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  • May 15, 2000

    Passenger cars boost Telco's April volumes

    Telco's volumes grew by 53% YoY in April'2000 to 12,253 units. However the growth in commercial vehicle and utility volumes was only 13% YoY for April'2000 as compared to 25% YoY in April'99. In FY2000 the company's utility vehicle volumes grew by only 2% YoY, hence the company has become more aggressive in this segment to regain market share. The utility vehicles volumes grew by 28% YoY in April'2000.

    TELCO, is India's largest commercial vehicle manufacturer. It dominates the MCV/HCV segment with a market share of 67%, the LCV segment with a 62% market share, utility segment with a 24% market share and passenger car segment with a 9% market share. It reported a turnover of Rs 64 bn in FY99. Its plants are located at Pune, Jamshedpur and Lucknow.

      April'99 April'2000 % change
    M & HCV 3,019 3,719 23%
    LCV 1,832 1,531 -16%
    Utility 1,430 1,826 28%
    CV and utility sales 6,281 7,076 13%
    Cars 1,743 5,177 197%
    Total sales 8,024 12,253 53%

    Due to the introduction of the Indica the base for car sales was lower in April'99 hence the growth of 197% YoY in April'2000 seems phenomenal. Though Telco's passenger car sales will continue to be buoyant in the current year the growth will be more or less in line with the industry growth. The company's recent introduction of a MPFI petrol version will further boost sales.

    In the LCV segment the company continues to see a decline in volumes, as competition has intensified. This is due to lower priced product of Bajaj Tempo and Eichers aggressive marketing campaign. During FY2001 Daewoo will be launching a new product in the LCV segment which will add to competition.

    In the utility segment the company had lost market share in FY2000, due to launch of Toyota Qualis, to regain its share and increase volumes in this segment the company will be launching the "Spacio", which is a variant of Sumo. It is a product which aims to cater to both the rural and urban market and will hence help the company garner up its market share.

    Market View:
    Analysts are positive on TELCO , however most of them have rated it as a "long term BUY", mainly because the car division is a drag on the company's profits.

     

     

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