In the quarter ended Dec ’07, the aggregate posted healthy growth of 26% to Rs 531 crore. However its operating profit margin (OPM) slipped by 220 bps to 16.1%. It restricted the growth to 10% to Rs 85 crore in its operating profit.

On the non-operating front, its other income grew marginally by 6% to Rs 18 crore. Its net interest cost zoomed ahead by 106% to Rs 33 crore largely driven by Asahi India Glass. The interest expense of Asahi India Glass (AIG), that contributed 68% to aggregate’s total interest expense, grew by stupendous 214% to Rs 22.28 crore.

Further the aggregate’s depreciation cost spurted by 56% to Rs 42 crore. It is attributed to 84% growth to Rs 26.56 crore in AIG that contributed 63% to the aggregate’s total depreciation cost. It led to downfall by 45% to Rs 28 crore in its PBT. However its tax provision slipped by 48% to Rs 12 crore owing to 220 bps reduction to 43% in its effective tax rate. Thus it partially arrested the fall to 43% to Rs 16 crore in its net profit.

Though the glass industry recorded decent topline, its margins took a beating owing to high raw material cost and power & fuel cost in the quarter ended Dec ’07. The industry largely caters to the automobile industry especially the domestic owing to logistics issue in exports. Currently with automobile industry appearing sluggish in the near term, the glass industry would be indirectly impacted by the same. Also it faces threat of cheaper imports from China. Thus the near term outlook is negative.