Telco came off its high of Rs 170 today, slipping 2.53% from its yesterday's close to Rs 163.50.

By 12:50 IST, close to 6 lakh Telco shares changed hands on BSE . In just two sessions, the scrip has now lost 7.15% from Rs 176.10. Prior to that, between 2 and 26 May 2003, the stock of Telco rose 18% from Rs 149.25 in anticipation of results.

On Tuesday, after market hours, Telco announced Q4 and FY 2002-03 results.

For the fourth quarter ended 31 March 2003, Telco posted a 15% fall in net profit to Rs 137.57 crore (Rs 161.68 crore) on a 16% increase in total income of Rs 2,997.92 crore (Rs 2,586.69 crore).

The 15% fall in net profit was in line with a capitalmarket.com poll of six automobile analysts, which estimated Telco's net profit somewhere between Rs 126 crore and Rs 150 crore for MQ 2003 as compared to a net profit of Rs 161.68 crore in MQ 2002, a fall of 7% to 22%.

Meanwhile for the year ended 31 March 2003, the company recorded a turnaround with a net profit of Rs 300.11 crore compared to a net loss of Rs 53.73 crore in the corresponding period of the previous year. Total income increased 21% to Rs 9,111.26 crore from Rs 7,525.92 crore in FY 2001-02.

On a consolidated basis, for the year ended 31 March 2003, the Telco group's net profit works out to Rs 298.67 crore (loss Rs 107.19 crore) on total income of Rs 9,627.92 crore (Rs 7,934.58 crore).

The company's board has recommended a 40% (Rs 4 per share on a face value of Rs 10 per share) dividend for FY 2002-03.

Analysts say the fall in the stock is on profit booking, after a sustained rise in the scrip in the last few sessions following anticipation that the results would beat market expectations.

The company is expected to show decent growth in the current year as well, but the aggressive cost-cutting which helped the company to register a turnaround is not expected to show much result here on, which is expected to put some pressure on the company's margins.

Aggressive saving in raw material costs and higher sales had helped Telco bounce back into the black from two loss-making years. The company posted a profit in the fourth quarter, the fifth straight quarter of profit, after reporting losses in the preceding seven quarters.

Meanwhile analysts say that Telco's fundamentals are strong. The export performance is also expected to help the company register impressive growth in the financial year ending 31 March 2004. Telco is expected to record further growth in the coming months due to the government's thrust on infrastructure projects, the boom in the replacement market and the shift in consumer preference from one-and two-axle vehicles to multiple-axle vehicles (in which Telco holds No. 1 position).

For the current year the company expects its sales volumes to grow by 7-8%.

Telco reported total sales of 2,19,860 vehicles (including exports) for 2002-03, representing a growth of 19.9% over the corresponding period last year (1,83,224 units). This was the highest ever sales achieved by the company in a fiscal year. Sales for the month of March 2003 were at 27,547 vehicles.

Export sales for FY 2002-03 were at 8,007 units. The company sold 1,121 vehicles in the export markets in March 2003.

Cumulative sales of commercial vehicles in the domestic market were at 1,07,442 vehicles in 2002-03 representing an increase of 30.1% over 82,564 vehicles sold in the corresponding period last year. Medium and heavy commercial vehicles (M&HCV) sales for the year at 74,323 units grew by 31.1%.

Light commercial vehicle (LCV) sales at 33,119 vehicles grew by 28.1% over the corresponding period last year. Commercial vehicle sales for the month of March 2003 were at 12,011 units.