For the quarter to June 30, 2000, the company reported a net profit of Rs 6.21 crore, compared with Rs 13.05 crore for the corresponding quarter last year.

The company has cited wholesale sales decline as a primary reason for the slump. Deputy chairman M Middleton stated in a release to the stock exchanges that sales declined mainly due to "restriction of supplies as a means to recover outstanding debts."

Stock-in-trade has decreased by 45.9 per cent from Rs 29.09 crore in the second quarter this year to Rs 15.73 crore in the corresponding period last year.

Sluggish market conditions prevailing during late 1999 and continuing over the first six months of 2000, were also cited as reason behind the lower profitability. The company's performance was also affected by the lockout in its plant at Peenya in Karnataka. Although the lockout has been lifted since July 3, the plant is yet to resume production.

A four per cent increase in value and a seven per cent increase in volume of retail sales have not helped the company to improve its performance. Net expenditure has been cut 3.38 per cent to Rs 202.4 crore in the period under review from Rs 209.47 crore posted in the corresponding quarter in fiscal 1999-2000. Net sales too, have come down 7.35 per cent to Rs 218.1 crore in the second quarter of 2000-01 from Rs 235.40 crore in the same period of previous fiscal. Both depreciation and interest payout increased by 3.8 per cent and 26.02 per cent respectively during the period under review.

Depreciation was Rs 3.3 crore in the second quarter of fiscal 2000-01 as against Rs 3.18 crore in the corresponding period last year.