Dragged down by lower sales, Hindustan Motors Ltd posted a net loss of Rs 35 crore for the quarter ended June 30. The company had reported net profit of Rs 17 crore during same period last year.
The Rs 17-crore profit in April-June came from an ‘exceptional income’ of Rs 48 crore from sale of land at Halol in Gujarat.
With the April-June 2012 quarter registering a net loss, the company, which claimed to have ceased to be a “potentially sick company” at the end of March 2011, moved deeper into the red.
During the quarter under review, net sales dipped by 13 per cent to Rs 103 crore. The shares of Hindustan Motors closed at Rs 9.90, up by 4.98 per cent on the BSE on Monday.
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According to C. K. Birla, Chairman, Hindustan Motors, profits were affected by the adverse dollar-yen exchange rate as well as poor market conditions.
The company’s management was working on a plan to put it back on the growth trajectory.
The company assembles Mitsubishi vehicles at its Chennai plant.
Addressing the shareholders at the 70{+t}{+h} annual general meeting, Birla said: “I know that you are concerned about your returns (on investment). I am also equally concerned about the returns, as we hold 36.52 per cent of the shares in the company. Our management is working on a plan to bring the company back on the growth trajectory.”
Speaking to newspersons after the AGM, Uttam Bose, MD and CEO, Hindustan Motors, said: “In 2011-12, our vehicle sales stood at 4,000 units. We plan to take it up to 8,000 units this year.” The company’s plant in Chennai is running at 60 per cent capacity.
“We are in talks with other players to see how to make the best utilisation of the plant,” Bose said.
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