The healthy result was attributed to volume rise, cost saving, restructuring and new product introduction. Its board has recommended a dividend of Rs 4 per ordinary share of Rs 10.

The profit before tax stood at Rs 510.37 crore as compared to a loss of Rs 109.21 crore in the previous year. By any standard, this is a significant turnaround," says Tata Engineering executive director Praveen Kadle.

Vehicle sales recorded an all-time high of 219,859 units (183,224 units), net sales / income from operations for the year peaked at Rs 10,837.01 crore (Rs 8891.95 crore), and revenues split 60:40 between commercial vehicles and passenger cars. Including last fiscal's cost-reduction of Rs 334 crore, the total cost savings in last three years aggregates to Rs 947 crore.

The total capital employed was Rs 4,161 crore (Rs 4,773 crore) and for the first time in its history Telco's networking capital was negative to the extent of Rs 433 crore in FY03. Free cash flows increased to Rs 1,130 crore (Rs 734 crore) and the company's debt stood reduced to Rs 1,458 crore (Rs 2,308 crore) with the debt equity ratio at 0.56.

Adds Kadle: "Telco's break-even levels have come down considerably in all three product categories — cars, utility vehicles and commercial vehicles. In commercial vehicles, the break-even point is now 32-33 per cent of the capacity [60 per cent a couple of years ago] and in passenger cars it is 49 per cent [75 per cent]."