The market shrugged off Telco's impressive results declared on Wednesday as expectations were built around a conference call slated for Thursday.

In fact, the scrip of the largest commercial vehicles maker moved flat (up 0.24% to Rs 165.25) in mid-morning trades.

By 11:45 IST, Telco registered volumes of over 478,000 shares on BSE . In the 11 sessions between 7 and 22 January 2003, Telco added on 6.8% to Rs 164.85 from Rs 154.35 in anticipation of solid results.

The scrip is showing weakness on institutional selling despite the impressive results. As per market talk, Unit Trust of India is selling on the counter .

Analysts and the market are keenly awaiting a conference call (scheduled at 12:00 IST). No one seems in a hurry to take a call on the counter at the moment. Despite the results being good, players still express a few doubts over certain details like the huge deferred tax accounted for in the last quarter as well as the Rs 36-crore inventory.

Analysts sat the huge deferred tax has brought net profit down (on the lower side of analysts' expectations). However, analysts still contend that the results are impressive - operating margins have improved.

Yesterday, after market hours, Telco announced impressive quarterly results. For Q3 ended 31 December 2002, the Tata group automobile major posted a net profit of Rs 75.71 crore (loss of Rs 55.54 crore) on sales of Rs 2,193.44 crore (Rs 1,772.80 crore).

Capitalmarket.com after polling eight automobile analysts had projected net profit at Rs 74 crore-Rs 87 crore. Net sales were projected in the range of Rs 2,039 crore and Rs 2,183 crore, a rise of 15% to 23%.

Telco's results have been boosted by a sterling showing by the company's commercial vehicles. Margins, as a result, have improved. The company said that its market share in the medium and heavy commercial vehicles (M&HCV) segment at 68.2% is the highest in the last three years. Meanwhile, the Indigo, launched in December 2002, received an enthusiastic response from customers with a good order booking position, it said.

For the nine-month period, Telco recorded sales of 1,42,024 units, 25.3% higher than the 1,13,337 vehicles sold in the corresponding period last year.

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, the shift in consumer preference from one- and two-axle vehicles to multiple-axle vehicles (in which Telco holds No. 1 position), and the increase in demand in the northern region (where Telco has a strong presence). A rise in road transport carrying food grains has also helped the company's growth. Besides, the company has resorted to aggressive cost-cutting and financial restructuring.

As on 30 September 2002, promoters held 32.2% stake in Telco, while foreign institutions, the public and local institutions held 20%, 16.3% and 21.2%, respectively.

BSE Code: 500570