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While domestic sales for the second quarter 2003 recorded a growth of 12.2%, export sales for the same period grew by 40%. Profit margins are lower as compared to the corresponding period last year on account of change in product mix and increase in expenditure.
In the domestic market, the anti-asthmatics and anti-hypertensives segments have shown good performance. In the exports markets, in addition to the above, the anti-AIDS and anti-ulcerant segments also showed good performance.
Material cost (as a percent to sales) is higher on account of product mix mainly due to API exports where the margins have been lower as compared to the corresponding quarter of last year.
Staff costs have increased due to direct appointment of a section of the field force who were earlier outsourced. The increase is also due to certain one-time ex-gratia payments to employees.
The increase in other expenses is on account of:
- Costs incurred for television campaign undertaken during the current quarter.
- Increase in maintenance costs to meet international regulatory standards.
- Higher recurring costs on overheads such as manufacturing, power & fuel and stores & spares due to significant level of activity at Goa compared to the corresponding period last year.
The increase in interest cost is due to short-term working capital borrowings during the quarter.
Provision for tax is comparatively lower on account of Section 80IB benefits for Goa facilities.
Other operating income has increased during the quarter due to higher export benefits.
Other income has increased mainly on account of exchange gains on the Company's foreign exchange exposures.
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