Scooters India

Scooters India posted a turnaround in its numbers for Q2FY14. A PSU with Government of India owning 90% stake, the company reported a net profit at Rs.60 lakh v/s loss of Rs.4 crore in Q2FY13. This turnaround was despite a 21% drop in revenue at Rs.37 crore. A 16% drop in operating costs, led by lower raw material cost and other income of Rs.1.44 crore helped the turnaround. For H1Fy14, loss decreased to Rs 3.14 crore as against Rs 11.94 crore in the year-ago period.

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.