LML Ltd, a maker of scooters and motorcycles that has restarted production after a year’s gap, reported a second-quarter loss of Rs15.28 crore, its 15th straight quarter of negative results.
The company had to close its Kanpur factory a year ago due to labour unrest. LML, which was referred to the Board for Industrial and Financial Reconstruction in September 2006, last week restarted scooter manufacturing after resolving the dispute.
LML shares closed at Rs15.40, up 4.98%, or 73 paise on the Bombay Stock Exchange on Friday. The shares have smartly recovered from their 52-week low of Rs8.25 on13 December 2006.
Sales during the quarter ended 31 March stood at Rs60 lakh against Rs65.5 crore during the same period a year ago. LML said it expected volumes to return to normal. “We’ll start with manufacturing for exports,” said K.C. Agarwal, executive director (finance). The company has raw materials and auto parts worth Rs101 crore, which it plans to use for making scooters. Agarwal refused to comment on the size of the order book and the kind of scooters LML would make.
LML, which started making scooters with technology from Italy’s Piaggio SpA, had a market share of 25% in 1998-99. But since then, its attempts to survive in the growing motorcycle segment have failed. In 2005-06, when LML’s factory was open, its market share fell to 1%. “Everything went wrong for LML,” said S. Ramnath, vice-president, SSKI Securities. “They lost the faith of customers by suddenly stopping production of scooters. They failed in the marketing and distribution of motorcycles too.”
India’s two-wheeler segment is dominated by Hero Honda Motors Ltd and Bajaj Auto Ltd, who together make more than 75 of every 100 two-wheelers sold in the country. The intense competition between these two has bled the smaller auto makers such as Kinetic Motor Co. Ltd, Yamaha Motor India Pvt. Ltd and in recent times, even TVS Motor Co. Ltd, the third-largest player in the industry.