Tata Engg Arms Hobble Too, Unwrap Bleak Numbers

Tata Engineering's dismal performance in 2000-01 appears to have rubbed off on its various subsidiaries as well.

Two of its three sub-assemblies, which were spun off into separate subsidiaries last year, posted combined losses of over Rs 36 crore, while its construction equipment arm Telcon registered a 13 per cent decline in profit for the year ended March 31, 2001.

Even its wholly owned IT services arm, Tata Technologies, recorded a 12 per cent drop in revenues in the last fiscal, though bottomline improved to Rs 4.5 crore during the period.

Of the two sub-assemblies, while HV Axles posted losses of Rs 14.14 crore on a turnover of Rs 267.86 crore, HV Transmissions' losses amounted to Rs 22.03 crore on sales of Rs 139.24 crore.

Financial results of the machine tools subsidiary, Telco Automation, were, however, not published in the annual report as the fiscal for the company has been extended to June 30.

Tata Engineering has been on the lookout for global strategic partners for offloading stakes in these three subsidiaries, but has yet to identify any partner yet.

On the other hand, net profits at Telco Construction Equipment Co, the company's subsidiary manufacturing earth moving equipment and related spares, declined 13.2 per cent to Rs 9.17 crore from Rs 10.57 crore during the previous fiscal.

The company's total income though had jumped to Rs 489.62 crore during fiscal 2001 against Rs 447.18 crore in fiscal 2000. Tata Engineering had earlier offloaded 20 per cent stake in the subsidiary to Hitachi.

Among other subsidiary companies, net profits of Tata Technologies, formerly Tata Technologies (India) have risen from Rs 3.85 crore during 1999-2000 to Rs 4.5 crore during the previous fiscal, despite slip in turnover.

Also, the company's subsidiary dealing with fleet management, Minicar (India), reduced its losses from Rs 2.33 crore to a little over Rs 18,700.

Tata Engineering, following its Rs 500 crore loss in the previous fiscal, is pursuing a strategy of growth in revenue from non-cyclical businesses, including operations of some of these subsidiary companies.