Telco dips further into red

MUMBAI, JULY 25: Driving in the reverse gear, Tata group firm Telco has announced a net loss of Rs 74 crore in the first quarter Q1 of t...

MUMBAI, JULY 25: Driving in the reverse gear, Tata group firm Telco has announced a net loss of Rs 74 crore in the first quarter Q1 of the fiscal 2001 as compared to Rs 34 crore recorded in the same period of previous fiscal.

Addressing the 55th annual general meeting AGM of shareholders, Telco chairman Ratan Tata has blamed the lacklustre performance of the company to an increase in diesel prices which has resulted in temporary stagnation in the segment. quot;The recent decision to classify commercial vehicles under the highest slab of unified sales tax has once again put a dampener on the demand for commercial vehicles,8221; the chairman said.

During the quarter, the automobile major earned a total income of Rs 1,802.92 crore from its operations, as compared to Rs 1,580.10 crore in the same quarter last year. TELCO8217;s other income for the first quarter stood at Rs 28.46 crore, by Rs 24.62 crore.

Total expenditure for the quarter reported stood at Rs 1,697.72 crore as compared to Rs 1,472 crore in the corresponding quarter last year. Depreciation and amortisation charges have also increased to Rs 117 crores from Rs 77.05 crore charged for the same quarter last year. Interest paid during the quarter stood stood at Rs 91 crore 68.42. The export turnover for the quarter stood at Rs 135.07 crore or US 30.24 million, at freight on board FOB value.

On its small car project, Indica, Tata said the unit is likely to break even this year as the company will produce at least 70,000 Indicas this year. The company requires to manufacture 90,000 cars on an annualised basis to break even, he added.

quot;The most heartening aspect of the year has been the strong market demand for Indica, which saw customer sales of over 54,000 cars and a year end market share of of 21 per cent in its price segment. Indica sales would have been higher were it not for constrains on production, caused to a great extent, limitations of vendor supplies,quot; he said.

The effect of the economic downturn over the previous two years continued to have a serious impact on the company during the year, Tata said. The situation has been compounded by the early start-up cost of the Indica car project, he added.

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Speaking about the cost reduction drive of the company he said: 8220;Cost reduction programmes have been implemented at all the plants as it is recognised that the scope for cost reduction is substantial.quot; The company has embarked on an aggressive cost reduction drive which has saved at least Rs 200 crore for the company, he said.