Coromondel International Q2 net down 32%

Profit was down due to higher production costs and reduced subsidy income

Hyderabad-based fertiliser and crop protection product manufacturer Coromondel International Limited reported a 32 per cent decline in consolidated net profit at Rs 160.08 crore for the quarter ended September, 2013, due to higher production costs and reduced subsidy income. The net profit in the corresponding quarter last year stood at Rs 236.88 crore.

Total income for the quarter under review, however, grew 19.7 per cent at Rs 3,228.38 crore as compared with Rs 2,697.03 crore in the corresponding previous quarter as sales were buoyant on the back of good monsoon in the present kharif season.

“Even though the profitability was impacted by the increased raw material costs, the net profit remains flat if the  prior year subsidy of Rs 107 crore is taken out of the comparable quarter’s earnings.

Our performance on sales front has been very encouraging with a 20 per cent growth when the industry had been facing a negative growth of 20 per cent over the last six months,” Kapil Mehan, managing director of Coromondel International, said.

Total expenditure during the quarter increased 25 per cent to Rs 2,942.72 crore (Rs 2,347.52 crore last year) with a  steep 33.6 per cent increase in raw material costs, which stood at Rs 2,107.56 crore as compared with Rs 1,577.56 crore in the year-ago period.

According to Mehan, the prices of phosphatic fertilisers are stable despite the rupee fall as the international raw material prices have been generally down.