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 1QFY02: Margins improve - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jul 24, 2001

    Telco 1QFY02: Margins improve

    Tata Engineering (Telco) has reported a loss in the first quarter of the current financial year. The company continues to hit by the economic slowdown. Sales for 1QFY02 have dropped by 5.6% to Rs 16,974 m. Sales of CVs, UVs and exports have declined by 21.9%, 10.0% and 24.5% respectively during the first quarter. However, there is something to cheer about. The loss reported by the company at Rs 989 m is lower than market expectations.

    (Rs m) 1QFY01 1QFY02 Change
    Sales 17,977 16,974 -5.6%
    Other Income 285 67 -76.6%
    Expenditure 16,715 15,711 -6.0%
    Operating Profit (EBDIT) 1,262 1,263 0.1%
    Operating Profit Margin (%) 7.0% 7.4%  
    Interest 1,062 1,021 -3.9%
    Depreciation 882 895 1.4%
    Profit before Tax (398) (586) 47.4%
    Extraordinary item (346) (403) 16.5%
    Tax - -  
    Profit after Tax/(Loss) (743) (989) 33.0%
    Net profit margin (%) -4.1% -5.8%  
    No. of Shares (eoy) (m) 255.9 255.9  
    Diluted number of shares 255.9 255.9  
    Earnings per share (Rs) (11.6) (15.5)  

    The market for commercial vehicles continues to remain subdued in light of the slow down in industrial production and lacklustre rural demand. Overall industry volumes have fallen by 14% in the first quarter and the medium-heavy commercial vehicle sales continue to remain depressed. The scenario is not different for passenger car and utility vehicles also. A 24.5% fall in exports to 2,326 units is a cause of concern because Telco's management had identified exports to be one of the key drivers of growth for the company in coming years.

    The slow down effect...
    Sales (nos) 1QFY01 1QFY02 Change
    CVs 18,357 14,335 -21.9%
    UVs & Cars 20,588 18,537 -10.0%
    Exports 3,079 2,326 -24.5%
    Total 42,024 35,198 -16.2%

    The slow down in sales has forced Telco to cut back production. Aggregate production in the first quarter has fallen by 21.8% to 35,834 units. Production of CVs and UVs (including cars) have dropped by 21.3% and 22.2% respectively.

    On the positive side, Telco has managed to cut costs by 6.0% and as a result, margins have gone up by 40 basis points to 7.4% in 1QFY02. The company has also lived up to its promise of realigning debt and efficiently utilising working capital, which has been a drag on the company's profitability. Interest cost has come down by 3.9% to Rs 1,021 m in 1QFY02.

    Extraodinary item include Rs 323 m towards deferred revenue expenditure and Rs 80 m towards employee separation costs. Net loss in 1QFY02 stands at Rs 989 m as compared to Rs 743 in the correponding quarter of the previous year.

    The stock has reacted positively to the annoucement of the results. At close, Telco was up over 10% at Rs 78.



    Equitymaster requests your view! Post a comment on "Telco 1QFY02: Margins improve". 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.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    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 17, 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


    Detailed Financial Information With Charts