Buoyed by drastic cost-cutting initiatives and higher price realisation, thecompany's net profit shot up 126 per cent from Rs 46.36 crore to Rs 104.69crore during the first six months of the current financial year. Net salesduring September-December rose marginally to Rs 283 crore, up from Rs 263crore last year, although volume sales dropped from 1.5 million tonnes to1.47 million tonnes during the period.

The GACL board, which met in Mumbai on Thursday, has declared an interimdividend of Rs 2.50 per share (25 per cent) for the current fiscal.

"Our improved performance has been largely due to the cost-cuttinginitiatives which has significantly improved our operational efficiencies,"GACL whole-time director Anil Singhvi said. During the last quarter, thecompany's power cost per tonne dropped to 94 units, from 100 units lastyear. The consumption and landed cost of coal were also significantly lowerduring the last quarter, Singhvi added.

Despite a sharp rise in profit, the GACL stock fell by nearly four per centat the Bombay Stock Exchange. The scrip closed at Rs 285.90, againstWednesday's close of Rs 297.

The operating profit during the second quarter increased from Rs 88 crore toRs 108 crore, while the same during the first six months shot up from Rs 161crore to Rs 211 crore. The operating margins improved from 33 per cent to 38per cent during the last quarter.

The company, analysts say, has benefited from the higher cement prices in thewestern region, where the company has a strong presence. The company's pricerealisation was, in fact, higher by around 7 per cent during the lastquarter.

Although the operating profit per tonne was significantly higher at Rs 722as against Rs 589 during the same period last year, it was much lowercompared to the first quarter. The company's operating profit per tonneduring the first quarter was Rs 858.

Cash profit rose from to Rs 86 crore during the last quarter from Rs 60crore last year, while profit before tax increased from Rs 29 crore to Rs 55crore during the period.

The company's profitability also got a boost due the lower interest outgoduring the second quarter which dropped from Rs 28 crore to Rs 22 crore.GACL had prepaid loans aggregating to Rs 247 crore last year.

The company has said that it expects the demand growth to be around 15 percent in the current fiscal. "The demand seems to be finally balancing withsupply, which augurs well for the cement industry. The company continues tobe very confident of its position in the cement industry and is looking atvarious avenues for further growth," GACL said in a statement.