Commercial Engineers' stock crashes 20%

MUMBAI: Commercial Engineers and Body Builders, whose shares were listed in October, crashed 20% to a new low after saying earnings growth prospects are dim with its biggest customer Tata Motors supplying only half the projected chassis due to problems with suppliers.

“In the last few months, the company has received only 40%-50% of the projected chassis from Tata Motors, as the latter has had issues with various component suppliers and is unable to produce chassis to the desired levels,” Commercial Engineers said in a filing with the Bombay Stock Exchange. “This has impacted sales adversely.”

The stock hit the lower circuit of 20% to close at Rs 74.2 with only sellers, as shown by the market depth statistics available on the BSE website. The stock has lost more than half its value since its listing price of Rs 22.8 on October 18. It sold shares at Rs 127 per share in the IPO through which it raised Rs 172 crore. The builder of body for automobiles such as buses and trucks said its half-yearly performance was below expectations.

The company reported a net profit of Rs 2.6 crore on sales of Rs 110 crore in the six-month period ended September 30. Tata Motors ac-counted for 52.5% of the net sales in 2010 and 69.2% in 2009, Commercial Engineers said in the offer document filed with the regulator at the time of the IPO.