BENGALURU (Reuters) - India's Hatsun Agro Product Ltd, which sells Arun ice cream and Arokya milk, reported a 2.9% fall in quarterly profit on Thursday, hurt mainly by a surge in prices for animal feed and milk procurement.
The Chennai-based company said net profit dropped to 464.4 million rupees ($5.71 million) in the quarter ended Dec. 31, from 478.4 million rupees in the year-ago period.
While the quarter coincided with the October-February flush season when cattle naturally produce more milk, the prevalence of lumpy skin disease meant some of it went to waste.
Moreover, fodder prices went up due to a shortage as wheat and maize output fell, affecting most dairy farms in India.
Hatsun Agro's raw material costs rose 15.6% to 12.03 billion rupees in the quarter and accounted for nearly three-fourths of total expenses.
The company was also hurt by the unexpected and prolonged rains in South India, from where it gets more than half of its revenue.
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Its overall revenue rose 7.5% to 16.95 billion rupees in the latest quarter. However, that was slower than the 13.7% growth in the December quarter a year ago.
Nonetheless, price rises helped Hatsun Agro's core profit margins expand to 11.21% from 10.59% a year ago. ($1 = 81.3450 Indian rupees)
(Reporting by Priya Sagar & Bharath Rajeswaran in Bengaluru; Editing by Savio D'Souza)
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