Processed steelmaker Bhushan Steel expects higher interest cost and depreciation slow the pace of its profit growth to about a fifth this fiscal, lower than the expected sales growth, its chief financial officer said on Tuesday.

"More utlisation will help in improving the margin, but due to the higher interest cost and higher depreciation level, net profit may not improve in the same proportion," Nittin Johari told Reuters in a telephonic interview.

Bhushan Steel's profit may grow by 15-22% and sales by 25-30% in FY12, Johari said, adding the operating margins may be around 27-29% in the current year.

The company is in the process of raising its hot-rolled (HR) steel capacity to 5 million tonnes by October 2012 from 2.2 million tonnes now.