Tyre maker Ceat today reported 63.26% decline in net profit at Rs 5.61 crore for the quarter ended September 30, due to higher interest and depreciation cost.The company had posted a net profit of Rs 15.27 crore in the corresponding period last year.
Total income during the second quarter, however, rose by 32.70% to Rs 1,118 crore from Rs 842.51 crore in the year-ago period.
"Our profit went down because of higher interest and depreciation costs. We have invested about Rs 700 crore in our new plant at Halol, which has not reached its full production capacity, and hence our interest burden is higher," Ceat Deputy Managing Director Anant Goenka told PTI.
Currently, the company is utilising about 40% of the total installed capacity of 150 tonne per day at Halol.
"We are expecting to reach the full capacity by June 2012," Goenka said.
During the quarter, the company's interest expenses went up by over two-fold to Rs 35.93 crore from Rs 13.29 crore in the year-ago period.
Depreciation cost in the second quarter also increased by over two-fold to Rs 17.26 crore from Rs 8.05 crore in the same period last year.
When asked about the raw material prices, Goenka said: "The prices have started cooling down... We are expecting a better third and fourth quarter."