Tata Engineering & Locomotive Co. (TELCO) is revamping the much-ignored Indica petrol model with a new engine. This was reported by a leading newspaper.
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).
Market shares in September 1999
TELCO's move to revive the petrol version of the Indica is attributed to the 40% hike in diesel prices. The petrol variant of the Indica does not have an air-conditioner. It will be launched with a new 75 hp engine, and a multi-point fuel injection (MPFI) system like its competitors. The car will be ready for launch by December. The company did not reveal the price at which the car will be launched.
Given TELCO's efficiency in most matters, its laid-back policy regarding the Indica petrol version is surprising to say the least. Its only with the diesel price hike has the company been forced to review its strategy, else it would have made little or no attempt to revive the petrol variant.
At a time when competitors are coming out with new models/variants to capture market share, TELCO can ill-afford to ignore any avenue for growth. Demand for petrol cars is robust, as its competitors (Maruti, Santro) have found out. TELCO may already have lost out on some market share, and will have to work harder to regain lost ground.
In view of the disappointing 2QFY2000 results, analysts have flagged a 'LONG TERM BUY' on the company largely due to downward pressure on operating margins in 2QFY2000 and in anticipation of repeat performances in the remaining two quarters of FY2000.
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: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407