The Hindu Business Line : Punjab Tractors net dips despite higher sales

PUNJAB Tractors Ltd has posted a 9.4 per cent increase in total income to Rs 603.3 crore in 2003-04 from Rs 551.1 crore in the previous fiscal. The increase was largely due to an upsurge in the domestic tractor industry in the latter half of the last fiscal as a result of the good monsoon.

However, despite the higher volumes, the company's net profit for the last fiscal dipped by 2.5 per cent to Rs 42.02 crore from Rs 43.12 crore in the previous fiscal.

Punjab Tractors volume sales in 2003-04 were at about 25,600 tractors compared to about 24,200 units in 2002-2003.

Industry officials point out that the margins of the company had been under pressure due to the escalating costs of key inputs such as steel.

As a result, consumption of raw material by the company was greater last fiscal at Rs 403.19 crore compared to Rs 356.17 crore in 2002-03.

Further, officials said that while Punjab Tractors was undertaking measures to control its inventory, they were still at sizeable levels.

A reason for this could be the product variants that the company launched over the last fiscal.

In fact, the fourth quarter alone saw Punjab Tractors roll out two new models - the 41 HP Swaraj 939 in Madhya Pradesh in January and 34 HP Swaraj 834 - in Uttar Pradesh in March, thus strengthening its product portfolio to eight models by end-March 2004.

The company is focusing on making these models readily available in other markets as well.

Meanwhile, the board of directors of the company has recommended a 45 per cent dividend on equity shares of Rs 10 each.