Telco recovered on renewed buying support  today following reports that the company is likely to outperform the industry growth in the current fiscal, especially in the commercial vehicles segment.

The scrip of India's largest commercial vehicle maker was up by 2.89% at Rs 171 on the BSE in afternoon trades, recovering from its intra-day low of Rs 165.20. Over 10.75 lakh shares  changed hands on the counter by 14:20 IST.

In the last six sessions, between 14 and 22 May 2003, the scrip rose by 7.4% to Rs 166.20 from Rs 154.75. 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.

Today's recovery on the Tata Engineering & Locomotive Company (Telco) counter was due to reports that the company expects sales of commercial vehicles to grow by 9-10% in the current financial year ending 31 March 2004, as against the expected industry growth of 7-8%.

The buying support was also attributed to hopes that the company's fourth quarter as well as FY 2002-03 results may be impressive.

Earlier, 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 (M&HCV) sales for the year  were at 74,323 units, up by 31.1%. Light commercial vehicle (LCV) 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.

Meanwhile,  analysts said that Telco'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.

Analysts said that 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 (PVH), 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 (loss of Rs 55.54 crore) on sales of Rs 2,193.44 crore (Rs 1,772.80 crore).