The company's topline grew by 17% to Rs 229.28 crore in June 2010 quarter. Fall in operating profit margin (OPM) by 520 bps to 11.6% pulled down the operating profit by 19% to Rs 26.63 crore. In terms of cost, as % to sales net stock adjusted, raw material cost grew by 320 bps to 34%. Also the other expenditure increased by 170 bps to 22% while staff cost grew by 100 bps to 20%. The cost of stores and spares increased by 10 bps to 9%. Only the cost of traded goods slipped by 140 bps to 2%.

The PBT before EO reduced by 17% to Rs 15.88 crore partially limited by growth in other income and fall in interest cost. The other income grew by robust 39% to Rs 4.11 crore while the interest cost crashed by 35% to Rs 2.98 crore. However the depreciation cost fell only by flat 1% to Rs 11.88 crore impacting the profits. Further on accounting EO expense of Rs 3.49 crore representing provision for voluntary evaluation process initiated by the company for various regulatory matters in factories (against nil in June 2009 quarter), the PBT after EO declined by 36% to Rs 12.40 crore. The net profit settled with 48% downfall to Rs 8.73 crore post accounting 1740 bps hike in effective tax rate.

Half Year Performance

In the half year ended June 2010, the company's topline grew by 24% to Rs 438.47 crore. However fall in OPM by 510 bps to 11.4% pulled down the operating profit by 14% to Rs 50.14 crore. Nevertheless, spurt in other income (by whopping 252% to Rs 12.12 crore) and decline in interest cost (by 43% to Rs 5.70 crore) and depreciation cost (by 1% to Rs 23.57 crore) lifted the PBT before EO by 17% to Rs 32.99 crore. However EO expense of Rs 9.20 crore (representing loss of Rs 5.71 crore incurred on sale of investments in Satara Rubbers & Chemicals Ltd -wholly owned subsidiary and provision for evaluation process of Rs 3.49 crore) against none in June 2009 quarter dragged down the PBT after EO by 16% to Rs 23.79 crore. Further growth in effective tax rate by 660 bps fueled the degrowth in net profit to 22% to Rs 20.08 crore.

The Company has identified some licenses obtained under Export Promotion Capital Goods scheme, which have expired and against which the company has partially fulfilled the export obligation (levied in lieu of permission to import fixed assets at a concessional rate of import duty). In view of partial shortfall in fulfilling export obligation, the management has decided, on prudent basis, to make a provision for the potential interest payable to the Government aggregating to Rs. 563.94 lacs ( Rs. 532.20 lacs was provided in financial statement for the year ended December 31,2009) in these financial statements and has also capitalized the duty portion to be paid for Rs. 330.06 lacs, during the year ended December 31,2009, with the relevant fixed assets and has depreciated the same as if these were capitalized on the date of respective assets being put to use. This has resulted in Company charging the additional year to date depreciation and additional interest of Rs. 870.26 lacs (Rs. 822.76 lacs up to December 31,2009) in profit and loss account.

The promoters' share in the total shareholding stood unchanged at 74.98% in June 10 quarter. The promoters' have pledged nil shares of the company.

Currently the scrip is trading at Rs 144.40 on BSE.