• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Port Info

• Ships in Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

K. Giriprakash

Bangalore , June 28

MICO'S bottomline may decline this year and in 2006 because of higher investment and change in product mix, the company has said.

In its annual report, Mico has said that with the investment spread across from 2005 to 2007 for manufacture of common rail systems and change in product mix comprising increase in volume of distributor pump and significant drop in demand for inline pumps, the net profits for the current year and for 2006 is expected to decline from the 2004 levels. Mico's parent, Bosch has committed an investment of Rs 1,000 crore in India for application, testing and manufacturing of common rail systems in India.

During 2004, Mico's net profit rose over 59 per cent to Rs 375 crore on sales of Rs 2,328 crore which grew nearly 23 per cent over the previous year.

According to an analyst who tracks the company, the sales in the first year of the roll out of common rail systems is expected to be 40,000 and the payback period is expected to be between five years and six years. The analyst said once Mico starts making common rail systems in India, the demand in the Asian region will increase leading to reduction in cost by 15 per cent to 20 per cent. This is expected to push up the sales of the common rail system by around 20 per cent.

Out of the Rs 1,000-crore investment, Rs 550 crore has been earmarked for production of common rail diesel system while about Rs 150 crore will be invested every year over a period of three years in other projects, including expansion of the Jaipur plant which makes distribution pumps. The high pressure pump for the system will be produced in Bangalore supported by injectors' production in Nashik.

Mico officials say 60 per cent of the diesel applications available in India will be common rail systems over the next 10 years. According to the analyst, the share of diesel passenger cars has grown from 4 per cent - 5 per cent in 1998-99 to around 25 per cent currently because of the availability of highly fuel efficient and higher torque new generation cars. The contribution of diesel pumps to total vehicle sales is expected to move up to 36 per cent by 2010.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
L&T gets Rs 418-crore contract in Harayana

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line