Though revenues at Rs 350.72 crore witnessed a 24.15 per cent jump compared with last year, net profit increased a mere 9.8 per cent. In fact, the slowdown in earnings growth was caused by a 56.9 per cent increase in interest costs and a 19 per cent rise in depreciation charges. This has resulted in the meagre increase in net profit, which was at Rs 27.57 crore.
A higher utilisation of working capital limits for the new production facilities and high cost of funds bloated interest costs. Total loan funds increased 58 per cent. The money was used to finance higher inventories and receivables, and also to fund investment in and loans to foreign subsidiaries.
Besides, the increased outgo on account of interest has also put pressure on the margins. That is clearly brought out by the fact that while operating margins without the