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Company Report

TELCO

Even as Telco launched its new car, Indigo with a price tag that is set to change the picture of the mid-size car segment, Indica performed well for yet another quarter backed by a smart growth in the commercial vehicles segment.

Telco reported 24 per cent rise in total revenues over the previous corresponding quarter to Rs 2,193.44 crore (Rs 1,772.80 crore).

Sequentially, however, sales went up by just about 1 per cent over the September quarter sales of Rs 2,165.23 crore. Net profit was Rs 75.71 crore after having reported a loss of Rs 55.54 crore during the previous corresponding period. At Rs 2,193.23 crore (Rs 1,772.65 crore) income from operations were up by 24 per cent over the previous corresponding quarter, while sequentially it went up 1 per cent over the September quarter sales of Rs 2,161.24 crore.

Telco’s performance during the quarter is much the result of a better show in the commercial vehicles segment, which saw a volume growth of 35 per cent on a year-on-year basis and 17 per cent sequentially.

Passenger cars, however, recorded a 24 per cent sequential decline in sales volumes, which nevertheless, went up 15 per cent on a year-on-year basis.

Telco’s export volumes have been steadily declining and for the quarter these were down 55 per cent over the previous corresponding quarter and 36 per cent sequentially. At Rs 1,906.64 crore (Rs 1,629.54 crore) operational costs went up 17 per cent over the previous corresponding quarter, while sequentially it went up by just about 0.35 per cent over the September quarter costs of Rs 1,900.16 crore. This has primarily been the result of a higher stock at the end of the quarter.

Higher steel prices have seen the raw material consumption rise 25 per cent on a year-on-year basis and 6 per cent sequentially, while staff costs were up 24 per cent over the previous corresponding quarter and 5 per cent over that in the September quarter. Other expenditure was up 12 per cent over the year-ago period and 1 per cent over the preceding quarter.

The stock currently trades at Rs 165 discounting its December quarter annualised EPS of Rs 9.47 by 17 times. With growth in the passenger car segment slowing down Telco will now be driven by Indigo and the buoyancy in commercial vehicle sales. The price factors all upside.

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