Despite the lower turnover expenditure was on the rise at Rs 713.01 crore for the third quarter as against Rs 696.11 for the corresponding period last year. Interest dropped marginally from Rs 1.25 crore in the third quarter last year, to Rs 1.05 crore in the current quarter.

Depreciation has also shown a sharp decline, from 180.03 crore last year to Rs 128.16 crore in the current quarter. The company's tax liability has declined marginally from Rs 56.5 crore to Rs 42 crore. Thesharpest decline has come in the earnings per share which has skidded to Rs 28.27 as against Rs 41.25 in the third quarter of 1997-98.

Meanwhile , the quarterly and nine-monthly results of the country's biggest two-wheeler manufacturer, Bajaj Auto Ltd, are below expectations and the stock could react negatively, analysts said on Saturday.

"The results are below expectations and it is quite likely that Bajaj may report flat to negative earnings growth in 1998/99 (April-March)," SSKI Securities research analyst Prabhat Awasthi said. Bajaj Auto announced a net profit of Rs 3.12 billion ($73.50 million) for the nine months to December 31, 1998, compared to Rs 3.29 billion in the same period of last year.Bajaj Auto said in a statement, total two- and three-wheeler production during the nine-month period was 1,012,463 units compared to 991,076 in the same period of last year while sales were 1,012,229 against 983,836 in the year-ago period. Analysts said the decline in profits was because of a dip inthree-wheelers sales, lower non-operational income and higher costs associated with new product launches.

"Three-wheeler sales in the third quarter were down 15 per cent in volume terms from the same quarter of last year," Kisan Ratilal Choksey Shares and Securities Pvt Ltd analyst Jigar Shah said.

"The stock could suffer a dip." Bajaj Auto shares have fallen 11.41 per cent this week, ending Friday at Rs 492.75.