The company posted a net profit of Rs 3.21 crore for the second quarter to September 30, 1988, after a loss of Rs 3.08 crore in the previous quarter to June 30, 1998.

The unaudited financial results reveal that Hindustan Motors recorded a 2.6 per cent increase in first-half sales turnover as against Rs 462.63 crore in the corresponding period of the previous year. The total expenditure increased by Rs 30.29 crore to Rs 434.12 crore as against Rs 403.83 crore. Interest cost also increased by 10 per cent to Rs 31.91 crore from Rs 28.98 crore.

HM had lined up a Rs 320-crore term loan from financial institutions for a major expansion and modernisation programme. It also proposed a Rs 54-crore rights issue of which Rs 30.56 crore, the portion to be mopped up by itsshareholders, has been underwritten by the FIs.

Of the Rs 320-crore investment programme, Rs 298 crore was for the Lancer manufacturing unit at Chennai, Rs 37.07 crore for the rural manufacturing vehicle unit at Pithampur in Madhya Pradesh, Rs 50.76 crore for modernising the Uttarpara unit in West Bengal, Rs 42.70 crore for expanding the earthmoving equipment manufacturing division and Rs 18.95 crore for augmenting the capacity of the power products division.

According to the notes appended to the provisional results, HM's projects are progressing satisfactorily. Commercial production of Lancer cars began this month while RTV commercial production will start in November.

The provisional results for the six months to September 30, 1998, has not made any provision for tax compared with the Rs 3.30 crore provided in the corresponding period of 1997-98.