Shares of the north based tractor major edged lower in early trade on Tuesday hit by poor Q4 March 2003 results.

Punjab Tractors shares were down 2.4% on BSE on BSE by the first one hour of trade to Rs 124. 3,800 shares changed hands in the counter on BSE.

PTL scrip witnessed some recovery on the bourses recently after it witnessed a sustained fall in the last few weeks. From a low of Rs 117.55 on 31 March 2003, the scrip surged 6.7% to a high of Rs 125.50 on 4 April 2003. Before that the scrip lost 21.5% from a high of Rs 149.75 on 28 February 2003 to a low of Rs 117.55 on 31 March 2003. PTL is owned by the Punjab State government, which has already initiative divestment in PTL. Divestment remains a key trigger for the stock.

Tuesday's fall in the PTL counter came after the company reported dismal Q4 March 2003 results. For Q4, PTL reported a sharp 55.9% fall in net profit to Rs 7.50 crore compared to Rs 17.02 crore in Q4 March 2002. Total income has decreased 42.3% from Rs 196.87 crore (Rs 1.96 billion) in MQ-02 to Rs 113.50 crore (Rs 1.13 billion) in MQ-03.

For the full year FY 2003, PTL's net profit plunged 57.7% to Rs 42.30 crore from Rs 100.02 crore (Rs 1 billion) in FY 2002. The total income decrease from Rs 892.07 crore (Rs 8.92 billion) in FY 2002 to Rs 549.60 crore (Rs 5.49 billion) in FY 2003.

PTL is currently witnessing difficult times due to sluggish demand and an inventory pile up, which has adversely affected its financial performance in the current year. The demand growth has been sluggish due to a poor monsoon. The fortunes of the tractor industry are directly linked to the monsoon.

The Punjab state government has already initiated divestment of its 23.4% holding in PTL by inviting initial bids. PTL's disinvestment has received strong response from a number of companies including some domestic and foreign tractor majors. Substantial interest has been generated over PTL as a result of its being a leading player in the tractor industry in the north and the second largest tractor maker in India after Mahindra & Mahindra. Thus, an acquisition of PTL would automatically promote the acquirer into the frontranks of the Indian tractor segment.

After receiving an overwhelming response from leading companies for the divestment of PSIDC's 23.4% stake in, the core group of officers in the Directorate of Disinvestment has asked 10 shortlisted companies to sign agreements of confidentiality. These companies include Mahindra & Mahindra, Escorts, Sonalika, New Holland, Tafe in league with Agco, SAME, FIIs Warburg Pincus, J P Morgan and CDC and a consortium led by NewBridge Llc, a private US equity fund.

The bidders are yet to put price bids. Market talk has it that the state government has pegged a reserve price of about Rs 211 per share. Reserve price is the minimum price below which the government will not sell its stake.

BSE code: 500344