Futures trading in Tata Engineering (Telco) stole the show today, with March futures gaining a premium in intra-day trading after many days. March futures traded at Rs 133.60, slightly higher than the spot price of Rs 133.35.
The stock had been trading at a discount of Rs 2 to the spot value of late. Dealers think strong export hopes helped improve the sentiment towards the stock. Telco got a boost from the company's plans to increase the share of exports in total revenue to 15 per cent from the current 9 per cent.
The scrip of India's largest commercial vehicles manufacturer and Tata group heavyweight figured as the biggest gainer in the 30-share BSE Sensex today. Over 10.09 lakh Telco shares were traded on the BSE. In the last seven sessions, Telco has lost 11.7 per cent to Rs 129.45 as on March 7, 2002, from Rs 146.60 on 26 February 2002. In the same period, volumes reached a high of 32.59 lakh shares on March 6, 2002 and a low of 3.86 lakh shares on March 4, 2002.
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The company is optimistic over export targets following increasing interest in its passenger vehicles. Telco is expected to record exports of between 3,500 and 4,000 vehicles during the current financial year ending 31 March 2002. Analysts add that the targeted rise in exports (by 6 per cent) is within reach.
The stock has also been fueled by expectations of a favourable auto policy and a rise in sales of its indigenously developed car Indica. Analysts feel that Telco was expected to gain after a correction over the last few days. Also, the Cabinet has allowed heavy industries to frame a vehicle terminal life policy, which means vehicles older than the prescribed number of years will have to be scrapped. This should benefit Telco, analysts feel.
Analysts say the budget has also been good to Telco what with the 15 per cent additional depreciation granted by the finance minister (FM) Yashwant Sinha to any company increasing capacity by 25 per cent or setting up a new plant.
Meanwhile, for January 2002, Telco registered impressive car sales. It notched up a 149 per cent rise in Indica cars to 7,365 units in January 2002 compared to 2,959 units in January 2001. Month-on-month, the company posted a 120 per cent rise from 3,338 units of Indica in December 2001. Total car sales in the 10 months to January 2002 stood at 48,746 units. The Indica now has a market share of 22.1 per cent in the eight-model premium hatchback segment, up from 17.4 per cent it held last year.
If the company shows a sustained growth in car sales in the next two months, then it could most likely break even. Analysts say Indica's V2 model is responsible for the huge rise in Telco sales. They say Telco's car sales have even outperformed the Santro, a Hyundai vehicle.