High interest rates lower Greaves Cotton Q3 net 23%

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CHENNAI, FEB. 6:

Greaves Cotton Ltd has reported around 23 per cent drop in net profit at Rs 34 crore for the quarter ended December 31, 2011, against Rs 44 crore in the corresponding previous year quarter.

This is despite posting 11 per cent growth in turnover at Rs 464 crore during the quarter against Rs 419 crore last year.

For the nine-month period, it reported a marginal drop in net profit at Rs 107.75 crore from Rs 108.39 crore in the previous year. The turnover for the period under consideration went up to Rs 1,306 crore from Rs 1,145 crore in the 2010 period.

A press release from the company says the business environment during the quarter under review was challenging. Many economic indicators affected businesses at large, with high interest rates in particular impacting the construction equipment business.

During the period, the company inaugurated its light engines nit at Aurangabad with a capacity to produce 87,000 engines. With this addition, the company’s total production capacity of light engines will go up to more than 3, 75,000 a year.

The release, quoting Mr Sunil Pahilajani, Managing Director and CEO of the company, says, “The company is making significant investments in areas such as product development, research, talent management, marketing and brand building. These are expected to improve productivity and deliver positive results in time to come.”

Greaves Cotton is a Rs 1,700-crore multi-product, multi-locational engineering company with core competencies in diesel and petrol engines, gensets and construction equipment.

It has declared the third interim dividend of 20 per cent, which works out to Rs 0.40 per share of face value of Rs 2 each, taking the total dividend to 60 per cent for the current financial year, the release added.

Source: http://www.thehindubusinessline.com/companies/article2865672.ece

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