Mumbai, July 21: Picking up speed from the turnaround last year, Tata Engineering & Locomotive Company (Telco), rechristened as Tata Motors Ltd, today reported a 258 per cent jump in net profit at Rs 100.31 crore for the first quarter ended June 30, 2003.

Encouraged by the performance, chairman Ratan Tata reiterated the company’s plan to make a low-cost people’s car over the next four to five years.

Talking about the name change, Tata said, “The company internally has decided on Tata Motors Ltd, as it defines the business we are in. It is true that Telco has become a familiar name but for many years Telco has not appeared on any of the company’s products.”

Referring to the low-cost small car project, he said, “We are not saying that we could succeed, but we can give it a try. The market potential is enormous.”

“We are creating a small group to work exclusively on the people’s car. The company will have to adopt an unconventional approach and it (project) is expected to take four to five years,” Tata said. “It will not involve stripping down of a car but starting to build one from a scratch,” he added.

Referring to soothsayers who had turned down the Tata Indica project as the ‘blunder of the decade’, Tata said that they would now see this endeavour to create a people’s car as another death for the company. “It’s a challenge and this company has faced challenges before and succeeded,” he said

The company also plans to raise $ 100 million (Rs 500 crore) in the next two months. Tata said the preferred choice to raise the money to retire high cost debt and for capital expenditurewould be foreign currency convertible bonds.

Executive director Praveen Kadle said, “The modalities like tenor are being finalised but this amount will be raised in the next 30-60 days or even before that.”

Tata Engineering has posted a net profit of Rs 100.31 crore in the reporting quarter against Rs 28.03 crore in the corresponding previous quarter. Sales income has increased 40 per cent to Rs 2,922.70 crore against Rs 2,087.24 crore last year.

Vehicle sales continued to grow with passenger car sales at 31673 as against 18373 cars in the corresponding previous quarter. Commercial vehicles continued to grow albeit marginally at 25856 as against 23702 vehicles in corresponding quarter of last year.

On the company’s future, Tata said, “The company's had a extremely good year and the current year has started well. But we are susceptible and vulnerable to risks as we become bigger,” he added.

When a shareholder asked whether the company has decided not to have a CEO after all, Tata said: “This company should have a CEO and will have CEO.”