Tata Engineering (Telco) has been another major success story in the last six months. It turned back into the black in the last quarter of fiscal 2002 after seven successive quarters of losses. Although, the company closed its year-end with a net loss of Rs 53 crore, its net loss declined massively from Rs 500 crore last year. Says Ratan Tata, chairman, Tata Engineering, "In this year of market stagnation, Tata Engineering successfully executed the first phase of its turnaround plan through improvements in several operating areas making it a much more efficient company." He goes on to add, "We have improved our operating profit margin from 5 per cent to 8 per cent through cost reduction, manpower rationalisation, better cash management and improved volumes".

Commercial vehicles showed an overall fall of 3 per cent compared to 15 per cent in the previous year. Light commercial vehicles witnessed a drop of 12 per cent while MHCVs had a 2 per cent increase.

Telco's revenue for fiscal 2001-02 showed a 9 per cent increase to Rs 8,918 crore and its bottomline was reduced to a loss of Rs 54 crore compared to Rs 500 crore in the previous year. This was possible because of cost reduction measures.

Perhaps the best answer was given by Tata at Telco's analyst meet this year when he shot back at analysts saying that they were the ones who had questioned Indica's viability and now the company's remarkable performance has come on account of Indica's strong performance. Indica sales rose by 24 per cent over the previous year with a 13 per cent share of the overall passenger vehicles market. The company sold 64,036 Indicas during the year.

During the year, Telco managed a cost reduction of Rs 332 crore through measures that included manpower rationalisation, system improvements and financial restructuring. Its net working capital at 
Rs 9 crore was much lower than Rs 150 crore a year ago.

The year 2002 has begun on a promising note with vehicle sales of 40,766 in the first quarter of this year compared to 35,384 last year. This is an increase of 15 per cent and this despite the bleak monsoon and overall economic conditions. Sales have improved by 23 per cent at Rs 2,087 crore and the company has made a profit of Rs 28 crore compared to a loss of Rs 99 crore last year.