Auto major Tata Engineering and Locomotive Company (Telco) chairman Ratan Tata yesterday announced that the companys turnover dipped 10 per cent to Rs 1,880 crore in the first quarter of 1997-98, compared with the corresponding period for the previous year.
Telcos exports also plunged 38 per cent to Rs 62 crore over the same period. However, the companys sales of construction equipment improved by 35 per cent during the quarter.
Addressing Telcos 52nd annual general meeting, Tata reassured shareholders that the market is expected to improve and the company hopes to report a 10-12 per cent increase in sales for the full year.
The Telco chairman also revealed that the Tata group holding in the company is currently 16.7 per cent (inclusive of Tata Sons stake of 2.9 per cent in Telco). The Tata groups holding in Telco has thus risen from the earlier level of 15.23 per cent.
Tata gave this information in response to a shareholder query. He added that the foreign institutional investor (FII) holding in the company is 5 per cent, while Indian banks and financial institutions hold 32 per cent. Diamler Benz has a10 per cent stake in the company, while GDRs account for another 16 per cent of the company holding. The company proposes to invest Rs 4,500 by the year 2000, and is targeting a final debt-equity ratio of 1:1, said Tata.
Discussing the commercial vehicles market, Tata predicted that it would recover by the second half of the current year. Answering a question on the issue of credit sales and high inventory levels, Tata said the figures on the balance-sheet were a snap-shot of the situation on a particular day March 31 and reflected the very high level of March sales. However ``our intention is to reduce the inventory levels, he added.
Referring to Telcos small car project, Tata said ``We expect to sell 1. 50 lakh vehicles. The small car project is expected to commence production by end-1998 and start functioning at full capacity in the second or third year of operations, he stated, adding that the project will entail an investment of about Rs 1,700 crore.
Telco expects the small car market to touch 6 lakh-7 lakh units by the year 2000, out of a total car market of 8 lakh-10 lakh units.
The company proposes to re-start full-scale production of the Tata Sierra and Tata Estate this year, and introduce the Tata Safari in the course of the year. The small car the Indicar is expected to be unveiled in the Auto Expo next year.
The company is also expanding its exports to Chile and Argentina, said Tata. ``However, our main markets are in Europe and Africa, he added.
