UTILITY vehicle and passenger car producer Tata Engineering & Locomotive Company on Tuesday announced a Rs 74-crore loss for the first quarter (April-June) of 2000-01 - more than double the Rs 34 crore loss incurred in the same period a year ago.

Losses were up despite a 14-per cent growth in sales to Rs 1,803 crore from Rs 1,580 crore previously.

Two key reasons were attributed to the less than encouraging performance - a drop of 4 per cent in sales of commercial vehicles coupled with sizeable increase in borrowing costs and depreciation and amortisation charges.

The jump in interest costs and depreciation charges was due to the implementation of its Indica passenger car project. Interest cost on borrowings rose 34 per cent to Rs 91 crore (Rs 68 crore) and depreciation provision went up by 52 per cent at Rs 117 crore (Rs 77 crore).

Addressing shareholders, Telco chairman Ratan Tata said Telco had revised down the projected sales of Indica cars in 2000-01 to 70,000 cars, from 90,000.

As a part of its restructuring operations and an attempt to bring down the overall costs, the company announced it will reduce the workforce by 7,000 in 2000-01.

"Of this, we hope to reduce 3,000 through a voluntary retirement scheme. The remaining 4,000 will be reduced through transfer of employees to subsidiaries," Tata told shareholders.

Ahead of the quarterly results, the Telco scrip firmed up by Rs 2.65 to Rs 107.80 on the BSE. It saw a volume of 1.11 million shares worth Rs 119 crore.

"The increase in sales was mainly on account of higher sales of `Indica' cars, higher exports and other income," Telco said.