The stock has appreciated by 25 per cent in a period of last one month. The stock has closed at its all-time high of Rs 685 on Friday. The recent uptrend has also been accompanied by a huge jump in trading volume which is again a positive signal.

Impressive performance, and positive fundamental outlook are responsible for current market optimism. First of all, the financial performance during the first half has been impressive.

For the six month period June 18, 2000, the sales have shown a growth of 17 per cent to Rs 246.42 crore. Marginal improvement in realisations and a strict control over cost have however given a smart boost to the profit margins.

OPM have risen from 14.08 per cent to 14.88 per cent. The advertisement expenditure have grown by just 9 per cent and is a major factor in driving the profit margins up.

Meanwhile, profit before tax improved by 24.17 per cent to Rs 27.63 crore. This improvement has been despite a 39 per cent lower other income which dipped to Rs 2.13 crore in the first half of the current year.

Besides good performance, another factor which seems to have given a boost to the stock price is the annoucement of a bonus issue, and the sale of the company's Colaba, Mumbai property for a consideration of Rs 8 crore.

The additional cash should further boost company's income. The shareholders of the company have also been rewarded with a bonus issue in the ratio of one equity share for every two existing equity shares held.

While the past track record for the company as well the stock price have been impressive, the future outlook also remains positive. As far as the performance is concerned, with its strong brand, and wide marketing network coupled with stringent cost controls, the company is continue to do well on the financial front and will be able to sustain the current growth rate.

For this reason, it is likely that the stock will continue to enjoy a high multiple of 40 plus. Technically speaking, the stock is in a good health as it is in no-resistance area. The performance is likely to be good.

For medium term players, the level of Rs 540 where it has a strong support, is the main reference point. Unless this level is broken, one should remain invested in this stock.

Deepak Singh Tanwar