Tata Motors Q2 net up 251 pc
Mumbai: Tata Motors Ltd has reported a 251.49 per cent rise in PAT for the second quarter ended September 30, 2003, to Rs 206.68 crore, against the previous corresponding Rs 58.80 crore. Net sales/income from operations was up 46.22 per cent at Rs 3,763.23 crore (Rs 2,573.64 crore).

For the half-year, PAT stood at Rs 306.99 crore (Rs 86.83 crore) compared to the corresponding full fiscal 2002-2003 figure of Rs 300.11 crore. The second quarter results were in tune with market expectations, though a few analysts hoped to see PAT at Rs 250 crore, courtesy belief that raw material cost impact might have been restricted by long-term supply deals. Amidst increase in total expenditure to Rs 3,324.35 crore (Rs 2,312.56 crore), raw material and component cost touched Rs 2,127.01 crore (Rs 1,294.53 crore). Steel price increase was a major factor. "We expect some pressure on operating margins in the coming quarters due to input costs and rise in export volumes.

So, a word of caution,'' Praveen Kadle, executive director, Tata Motors, said at a press briefing on Wednesday. In its statement, Tata Motors also cited the base effect of last year and negative impact to transporters' profitability should his fleet expansion not meet with freight rate improvement, as reasons to temper outlook. The company has signed an MoU to put in a binding bid for Daewoo Commercial Vehicle Company Ltd, Korea. Its acquisition can be supported by Tata Motors' cash flows and the efficiency improvements in place, Kadle and Ravi Kant, Executive director, said when asked about the timing of the buy given strains from raw material price increase. The acquisition itself won't call for any funds raising, Kadle said. Tata Motors raised $100 million in FCCBs in July, taking its balance sheet size to Rs 4,880 crore.

Without it, the balance sheet size at around Rs 4,000 crore is lower than the last fiscal level. Inventory is at 35 days, receivables at 16 days and negative working capital continues. In the second quarter, other income increased to Rs 22.78 crore (Rs 3.99 crore), while net interest dipped to Rs 25.99 crore (Rs 67.17 crore). Tata Motors prepaid/repaid borrowings worth Rs 560 crore against the earlier target of Rs 527 crore over 2002-04. Of the Rs 780-crore outgo forecast same time for capital expenditure, product development and strategic investment, the company had incurred Rs 576 crore at the end of the current quarter. EBITDA margin for the quarter grew by 172 bps to 13.8 per cent. In the first half, the CV market share was 58.5 per cent (54 per cent) and fiscal 2004 growth target was raised to 18 per cent.

Ravi Kant said fleet expansion is on, but the prevailing low interest rate, as incentive should not be discounted. Indica's market share in the first half was 24 per cent (23 per cent) and the Indigo leads the entry level C segment with 27 per cent share. Though it is assumed to be a high margin product, Dr V. Sumantran, executive director, Tata Motors, said the sedan should be viewed alongside stiff competition in its segment. "There is no easy growth in there,'' he said. Indica exports to MG Rover will commence in the third quarter. East European facilities given their low production cost and proximity to Western Europe, pose a challenge to sourcing bases like India. On the BSE on Wednesday, the Tata Motors scrip closed trade at Rs 365.15, on par with Tuesday's close of Rs 365.20.
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Indian Rayon delisting
Mumbai: Indian Rayon & Industries Ltd has informed the Bombay Stock Exchange that the securities of the company will be delisted from the Delhi Stock Exchange with effect from October 30, 2003.
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Keltron in pact with CDAC to produce UPS
Thiruvananthapuram: The Kerala State Electronics Development Corporation Ltd (Keltron) has entered into an agreement with the Centre for Development of Advanced Computing (CDAC) for the manufacture of a new range of uninterrupted power supply systems (UPS). As per the terms of agreement, the product will be manufactured by Keltron based on technical inputs from CDAC.

The new range of UPS, expected to cater to the requirements of the information technology industry, will be manufactured at Keltron's facility on the outskirts of Thiruvananthapuram, the release states. The new UPS systems will feature digital signal processing technology and an intelligent power module and are expected to offer significant savings in power usage, the release adds. Besides, the product is also expected to improve distribution efficiency and minimise power losses.
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Calcutta HC rejects Shaw Wallace plea to modify order
Kolkata: A division Bench of the Calcutta High Court comprising Justice D.K. Seth and Justice R.N. Sinha declined to modify the order of the Trial Court passed on September 18, 2003, on an appeal filed by Shaw Wallace & Co Ltd(SWC). The Union of India contemplated a proceeding under Section 226 (3) of the Income Tax Act to recover Rs 24.90 crore from Shaw Wallace. A writ petition was moved challenging the contemplation, where the Trial Court passed an order restraining the recovery officer to recover the amount at a time, if SWC pays the dues.

In the petition, Shaw Wallace stated that the amount can be paid subject to realisation of the payment from Andhra Pradesh Petro Chemical Ltd. In the appeal, Shaw Wallace urged that more than 50 per cent of the dues has been paid, but on the face of Government's attitude to recover the dues, this appeal for modifying the order, passed earlier, is needed. The Union of India objected to the principles of appeal filed by SWC, and expressed apprehension that any modification in terms of payment will allow Shaw Wallace to skip payment by withdrawing both appeal and writ petition. Hence, any order of modification with regard to payment can prejudice the finances of Union of India, it was submitted.
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ITC: Improved performance in challenging environment
Kolkata: The expected revival in rural demand is still to work itself into the financial performance of consumer goods companies. This is also evident from the performance of ITC for the second quarter ended September 30, 2003. Cigarette revenue growth was meagre around 3.5 per cent and operating profit growth was only 8 per cent. If post-tax profits have all grown at double digits it is mainly thanks to a 40 per cent growth in other income. Still, ITC needs to be commended for its performance. Despite the challenging environment, the company's profitability has only improved. This is evident in cigarettes, other consumer goods, agri-business and paperboards businesses.

In the hotels segment, which is seeing a revival in demand, profits have risen sharply.. Importantly, its performance in this quarter in cigarettes and hotels has been better than that of competition. Revenue and profit growth has been better than that of VST Industries in cigarettes. Similarly, its hotel division has performed better than Indian Hotels. In paperboards too, ITC's profits have grown marginally despite tough operating conditions. Some companies like TNPL, which are not strictly comparable, have reported decline in profits. However, the FMCG business continues to remain a cause for concern. The sector's losses, which dipped in June quarter compared to the March quarter, have once again risen. At about Rs 40 crore, they are also fairly sizeable.

A swift turnaround in profitability of this division is essential to ensure that it does not derail the already sluggish profit growth of ITC. The performance of this division is even more crucial in the next two quarters, since profits in the second half is generally lower compared to the first half of the year. If the FMCG division's losses do not rise sharply and sluggish growth trends in cigarettes persist, the earnings per share of ITC for 2003-04 is likely to end around Rs 60 - a growth of just less than 10 per cent for the year. In the following financial year, revival in rural demand is essential if earnings growth has to leap into double digits. Only that can propel the profit growth of cigarettes, which continues to account for nearly 90 per cent of ITC's profits.
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