The net profit after providing for tax works out to Rs 43.49 crore (Rs 34.25 crore).

For the period April-September 1998 the company has posted a turnover of Rs 609.42 crore compared to Rs 475.61 crore in the corresponding period of the previous year. During the current H-1 the company has sold 3,34,377 vehicles (2,76,966 in the previous period)- an increase of 21 per cent while the spare parts sale registered a growth of 31.8 per cent.

At operational level, the margin declined a tad lower to 11.45 per cent as against 12.46 per cent recorded in the previous half year. This has been basically due to increased wage cost on account of recruitment and training especially for the company's newly commissioned Mysore scooter plant.

The wage cost increased from 15.6 per cent to 16.5 per cent as a percentage of sales while the revenuefrom the scooter plant would accrue only in the second half. The scooter was launched on October 1 this year.

Interest cost was lower by 6.2 per cent at Rs 8.92 crore (Rs 9.51 crore) mainly on account of lower interest rates. Depreciation was higher at Rs 12.10 crore (Rs 8.71 crore) basically due to capitalisation of the Mysore plant.

INSIGHT
In line with expectations

So far the company has performed in line with expectations and its revenue and profit growth has been good. But in the second half the company will be faced with the prospect of higher fixed costs and lower year-on-year growth rates, considering that it will have to factor in the lower rate of growth for scooters vis-a-vis motorcycles. The stock has been an outperformer and has appreciated by 34 per cent in the last three months.