LML Ltd (LML) is the second largest scooter manufacturer in the country. Over the years, it has proved to be a strong competitor to the market leader Bajaj Auto. The company’s products, have been traditionally priced at a premium. Therefore, it does not have a major market share in the value for money segment, where volume growth is higher. LML also manufactures scooterettes. Driven by falling sales of scooters, LML has decided to foray into the highly-competitive motorcycle segment in collaboration with Daelim of Korea. Its long-standing dispute with its Italian partner Piaggio ended last year with an out-of-court settlement. As a result, Piaggio has now sold its stake in the company to the Indian promoters.

Two-wheeler maker LML reported a 29.8% drop in scooter sales in November 2001 to 10,133 units over 14,454 units sold in the year-ago month.Motorcycles sales, however, leapt by 96.6% to 5,873 units from 2,987 units.In October 2001 the scooter sales dropped by 43.2% to 10,088 units but the motorcycle sales zoomed by 113.5% to 4,063 units.Cumulative scooter sales (April-November 2001-02) went down by 24% to 91,198 units as against 1.02 lakh units in the year-ago period.Cumulative motorcycles sales stood at 28,340 units in this fiscal year posting an impressive growth of 364.6% over same period last year.

LML, which makes motorcycles under technical alliance with South Korea's Daelim Motor, had launched two 100cc models Energy and Adreno in September last year.It launched two new 110cc models Adreno FX and Energy FX in October 2001.The company is planning to introduce newer models in the 100cc segment in another six months.

LML had posted a net loss of Rs188mn for Q2 FY02 as compared to a net loss of Rs 189.6mn for the corresponding period last fiscal. Total income had increased from Rs1.02bn to Rs 1.09bn, up by 7% in the same period.

The company is increasing its production of motorcycles because that is the growing segment. LML may report profit in Q3 FY02 as against loss in the same quarter in the last year. In keeping with the recent trend, two-wheeler stocks once again shone amid dull market. LML however did not gain too much. Two-wheeler stocks like Bajaj Auto, TVS Motor and Hero Honda have been rising steadily in the past few sessions on the back of robust sales growth. LML has gained Rs7 in last three trading sessions, and is catching the attention of investors now. So it has good chance of appreciation in the short term to medium term.

Paisa Team

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