Drug major Cipla today said its net profit declined by 1.58 per cent to

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Rs 253.34 crore for the quarter ended June 30, 2011, over the same period previous fiscal.

The company had posted a net profit of Rs 257.42 crore for the quarter ended June 30, 2010, Cipla said in a filing to the Bombay Stock Exchange (BSE).

Net sales of the company stood at Rs 1,550.33 crore for the quarter ended June 30, 2011 as against Rs 1,427.38 crore for the corresponding period previous fiscal.

While the operating margins increased by Rs 32 crore mainly due to better utilisation by the Indore SEZ and changes in the product mix, the profit after tax is lower by 2 per cent, mainly due to increase in depreciation and higher taxes, Cipla said.

"Increase in depreciation (Rs 15 crore) is due to additions to the fixed assets mainly on account of Indore SEZ factory," it added.

The other reasons for the lower net profits are marginal increase in interest cost on working capital loans, increased staff costs and decrease in other income, Cipla said.

Shares of Cipla Ltd today closed at Rs 308.40 on BSE, up 0.73 per cent from previous close.