LML climbed 2.6% to Rs 27.55 after registering a 150% jump in motorcycle sales for March 2003.
A total of 400 LML shares were traded on BSE by 10:20 IST. The scrip has proved firm of late, rising 20.8% to Rs 35.15 from Rs 29.10 between 27 January and 3 March 2003.
For March 2003, LML has registered a tremendous 577% rise in motorcycle sales to 17,674 units from 2,611 units in March 2002. However month-on-month , sales dropped 6% from 18,815 motorcycles in February 2003. For the financial year ended 31 March 2003, the company reported a 146.7% rise in motorcycles sales to 1,20,210 units from 48,726 units a year earlier. Meanwhile, LML, for March 2003, registered a 150% jump in overall sales to 20,784 units from 8,253 in the same month a year ago.
The strong growth in motorcycle sales has been spurred on by LML's newly launched Freedom, a model expected to do well and provide tough competition to LML's competitors like Hero Honda, Bajaj Auto and TVS Motor. Freedom is placed in the executive segment on par with the Ambition from Hero Honda's stable.
Analysts, however, note that, in March 2003, sales declined compared to the previous month, a cause of concern. This is perhaps why the stock has not witnessed a substantial spurt despite the 150% jump in sales year-on-year. Analysts are still guarded about making out-and-out projections for the company. They say, if vehicle sales continue to be strong, LML could witness increasing fortunes just as the launch of the Victor' had precipitated for TVS Motor.
With the four-stroke 110cc motorcycle, Freedom, the company has entered the mass commuter motorcycle market, presently sized at around 30 lakh vehicles per annum. The response to the bike in Uttar Pradesh (where it was first launched) has been overwhelming. This new vehicle will enter other states in a progressive manner during the coming months. Based on the above and barring unforeseen circumstances, the company expects to show improved performances during the second half of the current fiscal.
For the third quarter ended 31 December 2002, LML registered a net loss of Rs 8.76 crore compared to a net loss of Rs 13.18 crore in the corresponding period last year. Net sales increased by 31.3% to Rs 168.58 crore from Rs 128.37 crore DQ 2001.
LML, a leading scooter maker, has been dogged by a shift in buyer preference to motorcycles from scooters in the last couple of years. The shift in demand has compelled the company to foray into the motorcycle segment.
Established in 1972, LML is adding a host of products to its range, including vehicles of 2-stroke and 4-stroke engines, having geared variomatic transmission. The company is also projecting a product mix of 45% bikes and 55% scooters, equally divided between metal-body and plastic-body gearless variants.
As on 31 December 2002, promoters' holding in LML was 49.9%, while that of the public and foreign institutions was 35.68% and 7.88% respectively.