Telco was the biggest loser among 30-share BSE Sensex stocks on Tuesday on sustained selling pressure.

The scrip of India's largest commercial vehicle maker was down by 3.19% at Rs 150 on the BSE by 12:45 IST, slipping from its intra-day high of Rs 155.95. Over 420,000 shares changed hands on the counter.

In the last seven sessions, the scrip lost 10.23% from Rs 167.10 on 28 February 2003. Dealers said the slide on the Telco counter is mainly due to the weakness in the derivatives segment. The geo-political tensions has forced players to square up their positions, with the Telco stock bearing the brunt in the cash market. Still, for the current month, the open interest position in the Telco stock in the derivatives segment is 36.66 lakh shares.

Analysts said that Tata Engineering & Locomotive Company's fundamentals are strong, which may lead the company to register impressive results for the financial year ending 31 March 2003. The vehicle sales figures for the current month are also expected to be impressive.

Last week, Telco recorded a 15.45% rise in total sales at 21,176 vehicles in February 2003, compared to 18,342 vehicles sold in February 2002. Of this, the company sold 20,152 vehicles in the domestic market and 1,024 units overseas. Month-on-month, sales were lower by 12.2% from 24,116 units. Sales for the first eleven months (April-February 2002-03) stood at 1,92,314 units, 22% higher than the corresponding period of the previous year.

The lower month-on-month sales was attributed to the postponement of purchases by customers ahead of the Union Budget for 2003-04, following the hopes of sops for the automobile sector. Analysts said that Telco's medium and heavy commercial vehicle sales figures have been excellent. In February 2003, the company sold 8,415 M&HCV vehicles, a 58.2% rise over that of February 2002 (5,321 vehicles).

It sold 12,041 commercial vehicles (including M&HCVs as well as LCVs) in February 2003, 41% more than the 8,548 units sold in February 2002. However, utility vehicle sales dropped in February 2003, a 24.4% fall to 2,141 (2,831). The car segment registered sales of 6,994 (6,963) vehicles last month.

Telco is expected to record further growth in the coming months due to the government's thrust on infrastructure projects, the boom in the replacement market and the shift in consumer preference from one- and two-axle vehicles to multiple-axle vehicles (in which Telco holds No. 1 position). Besides, the company has resorted to aggressive cost-cutting and financial restructuring. Telco's market share in M&HCV segment is at 68.2%, the highest since the last three years.

The company expects to end FY 2002-03 with a CV growth rate of around 25% against earlier expectations of 15-18%. However, the company has maintained its passenger vehicle (cars and MUVs) domestic volume estimate of around 1,00,000 for the fiscal. For Q3 ended 31 December 2002, the Tata group automobile major posted an impressive net profit of Rs 75.71 crore (loss of Rs 55.54 crore) on sales of Rs 2,193.44 crore (Rs 21.93 billion).

BSE code: 500570