Godrej Industries' Q1 net surges 75 per cent on higher investment profits

Our Corporate Bureau
25 July 2006

Net sales for the quarter declined 12.08 per cent to Rs 160.69 crore from  Rs182.76 crore, as the company had divested its foods business with effect from 31 March 2006. The company booked an extra-ordinary income of Rs 0.94 crore from the sale of foods division. Adjusted for this one-time income, net profits increased 64.87 per cent.

Operating profits for the quarter declined substantially by 45.54 per cent. Operating margins as a percentage of net sales fell to 6.46 per cent from 10.43 per cent for the previous year quarter.

Input costs declined 8.6 per cent while staff costs were lower by 20.82 per cent. Other expenses increased marginally by 1.9 per cent.

Interest costs jumped 9.69 per cent during the quarter and depreciation charges went up by 10.76 per cent.

The company managed the substantial increase in bottom line because of a 391 per cent jump in other income to Rs 20.98 crore from Rs 4.27 crore for the prior year quarter. Most of the other income came from investment income, which increased to Rs 20.67 crore from Rs 3.97 crore for the previous year quarter.

The company's core chemicals business reported a marginal 5.74 per cent rise in net sales to Rs 137.54 from Rs 130.07 crore for the pervious year quarter. However, profitability at the gross level fell drastically lower as PBIT declined to Rs 6.55 crore from Rs 19.8 crore for the previous year quarter.