ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Threatened by Cost-Push

Threatened by Cost-Push Hansavivek TATA ENGINEERING AND LOCOMOTIVE COMPANY (TELCO) has suffered a setback in its working during the year ended March 1984. Although it produced more vehicles than in the previous year, it earned a lower gross profit of Rs 50.86 crore against Rs 52.08 crore. Sales were also marginally lower at Rs 755 crore against Rs 759 crore. These figures reflect a decline in margins. With a higher provision for depreciation due to change in income-tax rules (Rs 29.23 crore against Rs 21.87 crore) and a tax liability of Rs 2.35 crore after the absence of any tax liability for seven years, gap has widened appreciably. Net profit is over a third lower at Rs 19.28 crore (Rs 30.21 crore). Directors have maintained equity dividend of 20 per cent on an enlarged capital, but at cost of earnings cover which has declined from 3.67 times to 2,11 times.

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