Telco came off from its early high on profit booking on the counter after recent gain.

Currently the scrip of India's largest commercial vehicle maker was trading marginally lower by 0.90% to Rs 159.60, came off from its early high of Rs 162.50. A total of 52,210 shares have changed hands on the BSE till 10:50 IST. In the last three sessions, between 2 and 7 May 2003, the scrip rose by 8% to Rs 161.05 from Rs 149.25. It has been on a roller coaster ride of late, moving in a range of a high of Rs 170 and a low of Rs 150. Earlier, the scrip staged a smart recovery from a low of Rs 52-65 in June 2001.

For April 2003, the company reported an impressive 55% rise in vehicle sales to 14,979 units as against 9,660 units a year ago. The total sales of passenger cars rose by 56.7% to 7,931 units, compared to 3,213 units in April last year. While the Indica volumes rose to 5,061 units, as against 1,831 units in the corresponding period last year, total sales of utility vehicles and the Indigo, its mid sized sedan, stood at 1,472 units and 1,398 units respectively.

Domestic sales of commercial vehicles rose 9.3% to 7,048 units last month, against 6,447 units a year ago. Even as the medium commercial vehicle volumes remained flat at 4,539 units, the sales of light commercial vehicles jumped 33.2% to 2,509 units.

The sales posted by the company come in wake of the 10 days truckers strike as well as on account of low sales in April last year, when there was a planned shutdown at the company's passenger car facility for the Indigo switchover activities.

On the contrary analysts said the sales figures are not as impressive as they look. They say due to the lower base of the last year, the company was able to record good vehicle sales for April 2003. Meanwhile analysts are also disappointed by the company's performance in the commercial vehicle segment, especially M&HCV's, which remained more or less flat.

However they feel that the stock will bounce back after a correction as players are bullish on the growth of the four wheeler sector. And with limited option to invest in automobile sector, they are likely to park their funds in Telco.

Meanwhile there has been sustained buying in the stock from institutions, inclusive FIIs. As per market buzz, Alliance Capital, Salomon Smith Barney and Kotak Securities were some of the brokerages active on the Telco counter, accumulating the stock following its attractive valuation. The buying support was attributed to hopes that the company's fourth quarter results may be impressive. Also, there were expectations of a good performance from the company for FY 2002-03.

Analysts said that Tata Engineering & Locomotive Company's fundamentals are strong. The export performance is also expected to help the company to register impressive growth in the financial year ending 31 March 2004.

Meanwhile Telco reported total sales of 2,19,860 vehicles (including exports) for 2002-03, representing a growth of 19.9% over the corresponding period last year (1,83,224 units). This was the highest ever sales achieved by the company in a fiscal year. Sales for the month of March 2003 were at 27,547 vehicles. Export sales for FY 2002-03 were at 8,007 units. The company sold 1,121 vehicles in the export markets in March 2003.

Cumulative sales of commercial vehicles in the domestic market were at 1,07,442 vehicles in 2002-03 representing an increase of 30.1% over 82,564 vehicles sold in the corresponding period last year. Medium and heavy commercial vehicles sales for the year at 74,323 units grew by 31.1%. Light commercial vehicle sales at 33,119 vehicles grew by 28.1% over the corresponding period last year. Commercial vehicle sales for the month of March 2003 were at 12,011 units.

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 recently signed a joint venture with Phoenix Venture Holdings, owners of the MG Rover Group, to distribute the Safari off-roader and Loadbeta pick-up trucks in the UK and Irish markets. Analysts are hopeful that this venture would be very fruitful for Telco.

For Q3 ended 31 December 2002, the Tata group automobile major posted a net profit of Rs 75.71 crore on sales of Rs 2,193.44 crore (Rs 21.93 million).

BSE code: 500470