The defence PSU which began FY13 on a bad note, continues to struggle. In Q1FY13 the company had a net loss at Rs.39 crore and this loss has risen 60% at Rs.62 crore. Though its topline rose 40% at Rs.581 crore, operating costs continued to remain higher than the revenue, led by raw material cost thus pushing the company into the red. Its loss at end of H1FY13 now stands at Rs.102 crore.

Apart from its falling operating efficiencies, the company’s name remains tarnished due to its involvement Tatra truck probe. The then CMD of the company, highly controversial, VRS Natarajan has since then resigned. In August’12 , the company’s name appeared in another scam, over plot allotment and land scam. Thus major corporate governance issues continue to dog the company and now these losses has further made the outlook pretty grim for the PSU.  The order from the defence sector has dried up for now due to the scandal but many argue that being a Govt company, it will never be black listed and no one ever cast aspersions on its quality. Thus many feel that though the patch is rough for now,  once its name is cleared, orders will once again start coming in.