A press release issued by the company states that the relatively better performance was mainly on account of the favourable impact of higher sales volume and continuing improvement in operating margins helped by cost reduction initiatives.

The overall loss for the nine months was Rs 76.05 crore which is in sharp contrast to the corresponding period's profit of Rs 186.27 crore.

Net sales for the third quarter was Rs 1,571.74 crore, marginally higher than Rs 1,562.49 crore in the corresponding period last year. However, total sales for the nine months was lower at Rs 4,285.54 crore compared to Rs 5,412.66 crore, a fall of nearly 21 per cent.

The operating profit for the third quarter was Rs 133.79 crore (Rs 121.92 crore) while gross profit afterinterest but before depreciation and taxation was Rs 47.01 crore (Rs 43.53 crore). Interest was higher at Rs 108.52 crore as against Rs 81.97 crore while depreciation was marginally down to Rs 68.59 crore from Rs 71.19 crore.

The release states that the third quarter saw an improvement of 14.7 per cent in the company's overall sales volume and 9.4 per cent in value over the immediately preceding quarter. Growth in sale of commercial vehicles from 27,820 to 31,908 during this quarter over the previous one is on account of improving freight rates. The release adds that a robust growth in the commercial vehicle sector will depend on the overall economic review of which signs are "yet to be seen."

Overall sales volume for the first nine months of the current year was 85,132 vehicles compared to 1,15,587 vehicles in the corresponding period of 1997-98, a drop of 26.4 per cent.

INSIGHT
The trend of major companies upsetting market expectations continues with the results from Telco. The company hasreported a Rs 21.58 crore loss but only after considering an additional non-operating income of Rs 21.5 crore for the quarter, which includes dividends from investments. If this income is excluded, then loss for the quarter would be Rs 43 crore, which is in excess of market expectations. For the earlier reporting periods Telco had exceeded market expectations.

The good news is that Telco's operating profit has increased YoY, and has contributed to a greater proportion of the nine month operating profit. The Indica bookings will contribute a return on the float of the Rs 2,500 crore booking amounts that have been received, besides an incremental cash flow of Rs 250 crore, for the bookings retained.