Hit by high input costs and increased excise duty on branded garments, Tata Group retail firm Trent today reported 71.66% decline in net profit to Rs 3.40 crore for the the second quarter ended September 30, 2011 as compared to the same period last fiscal.
The company had a net profit of Rs 12 crore in the same period last fiscal, Trent said in a filing to the BSE.
"The results of the quarter have been impacted by a considerable increase in raw material input prices and the introduction of excise duty on branded garments, which were not passed on to customers fully due to market conditions" the company said.
During the quarter, the company's raw material costs soared nearly two-and-half fold to Rs 1.05 crore as against Rs 44.61 lakh in the same period last fiscal.
In the Union Budget this year, Finance Minister Pranab Mukherjee had proposed to impose 10% excise duty on branded ready-made garments. Later manufacturers were given slight relief by enhancing abatement from 40% to 55% of the retail sale price.
Trent said its total income, however, rose to Rs 227.72 crore for the second quarter, as against Rs 182.80 crore in the same period last financial year.
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For the six months ended September 30, 2011 the company posted a net profit of Rs 13.63 crore, compared to Rs 20 crore in the same period previous fiscal.
Shares of Trent today closed at Rs 1,074.05 on the BSE, up 0.19% from its previous close.