The Telegraph
Since 1st March, 1999
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Company Report


Tata Engineering and Locomotive Co’s fiscal 2002-03 performance reflects combined impact of the success with Indica and a solid growth in the commercial vehicles segment.

Total income for the year at Rs 9,111.26 crore (Rs 7,528.77 crore) was up 21 per cent from the year-ago period. The total spending at Rs 8,805.15 crore (Rs 7,536.68 crore) was 17 per cent up from the previous year, which saw the company post a net profit (before extraordinaries) of Rs 306.11 crore against a loss of Rs 7.91 crore during the same period last year. Income from operations at Rs 9,093.32 crore (Rs 7,505.51 crore) was up 21 per cent.

Operational costs at Rs 7,956.03 crore (Rs 6,855.26 crore) were 16 per cent up from last year. With steel prices on the upswing, Telco’s raw material costs were up 21 per cent from last year but staff costs were well under control rising by 4 per cent over the corresponding previous period.

Other expenditure went up 18 per cent. The rise in costs being much lower than the increase in revenue margins improved with operating profits moving up by 75 per cent over the previous year to Rs 1,137.19 crore (Rs 650.25 crore), while OPM shot up to 13 per cent against 9 per cent during the comparable period.

Other income at Rs 18.04 crore (Rs 23.26 crore) was down 22 per cent from the previous year. But this was fairly compensated by a falling interest cost, which at Rs 279.35 crore (Rs 382.23 crore) was 27 per cent down from last year. Depreciation went up by 1 per cent over last year to Rs 359.51 crore (Rs 354.67 crore).

Last year Telco enjoyed the benefit of a tax write-back of Rs 55.48 crore against which the provision for tax during the current year stood at Rs 210.26 crore. Even after this it reported a net profit of Rs 306.11 crore against a loss of Rs 7.91 crore during last year.

Telco has performed well throughout the year but the growth rates are now slowing down as can be seen from its fourth quarter numbers. Net sales at Rs 2,991.02 crore (Rs 2,586.80 crore) were up 16 per cent on a year-on-year basis. With a control on the operational spending, margins improved.

The stock, currently trading at Rs 171, discounts its full year EPS of Rs 9.57 by 18 times but March quarter EPS by 10 times.

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