Telco Q3 losses up at Rs 60 cr

The company’s gross revenue of Rs 6,172.92 crore in the first nine months of the current year was 42 per cent higher than Rs 4,339.49 crore recorded in the corresponding period of the previous year.

The company stated that the third quarter results reflect the impact of the full commissioning of the Indica plant during the quarter. While the ramp-up production of the Indica has taken place during the year, the break-even level of operations is expected to be reached towards the end of the financial year 2001. The company has continued to implement various cost reduction mesures during the year, the full impact of which is expected in the last quarter, the company stated in a release.

"Telco seems to have been affected by two things, the Indica car project, which has seen higher costs in terms of commerical advertisement, and secondly by higher costs incurred in fitting its commerical vehicles with Cummins engines," says a Mumbai-based analyst.

Though commercial vehicle sales were good, TELCO had to fit it with the latest Cummins engines thereby incurring additional cost of between Rs 50,000-70,000 per vehicle. This cost has not been fully passed on to customers as yet. “The Indica car project has also affected them. It is expected to achieve break-even only at around 90,000 cars per year or around 7,000 cars per month. Though TELCO achieved around 5,320 sales in December, it had to spend additional amounts in television advertisements," he said.