Scooters India

Scooters India posted a turnaround in its numbers for Q2FY14 and fortunately, it bettered it in Q3FY14. A PSU with Government of India owning 90% stake, the company reported a net profit at Rs.60 lakh in Q2 and now in current Q3, it improved to Rs.6 crore.  This turnaround was despite a 21% drop in revenue at Rs.37 crore and this was on a 13% (QoQ) rise in net sales at Rs.42 crore. Operating costs remained low, led by lower employee cost and other expenses. Hefty other income of Rs.3.4 crore helped better the bottomline. For 9MFy14, the company has finally turned around with a net profit at Rs.3 crore compared to net loss of Rs.6 crore in FY13.

This UP based PSU is engaged in designing, developing, manufacturing and marketing a broad spectrum of conventional and non-conventional fuel driven 3-wheelers. The company was selling scooters under the brand name of Vijai Super for domestic market and Lambretta for overseas market. It sells three wheelers under the brand name of VIKRAM/LAMBRO. However, in 1997, the company discontinued its two-wheeler production and concentrated only on manufacturing and marketing of 3 wheelers. The company has a negative networth but sits on cash worth Rs.85 crore. One cannot help but wonder why the Govt of India wants to remain invested in such three-wheeler companies when it should actively consider divesting its stake and raise the much needed money.