Archies Greeting: A significantgrowth in franchise has helped Archies Greetings & Gifts to record impressive growth in sales as well as profits. At present, the company has increased the number of Archies' galleries to 358, a jump of over 100 per cent from 175 two-and-a-half-years ago.

The expansion of franchise had a direct impact on revenues. Sales during the first half of 1998-99 recorded a jump of 34.29 per cent to Rs 25.02 crore. But much more than revenue growth, what is impressive is a jump in operating profit, which has taken a smart leap. Operating-profit margins have jumped from 13.02 per cent to 17.39 per cent. Profit at the net level improved by 83.31 per cent to Rs 2.94 crore, netting an earning per share of Rs 18.12 (annualised).

With a steady growth in franchise coupled with the defensive nature of the greeting-card business, results in the second half are expected to be equally good. On the latest earnings, the stock price gets a price multiple of 20. But the surge in discounting has taken place only recently. Till Maythis year, price multiples for this stock was hovering in the range of 6-8.This could be attributed to listing on the NSE and BSE. Till September, the stock was listed on the Delhi Stock Exchange. A shift to two most popular stock exchanges seems to have attracted more buyers. However, the shift alone cannot ensure a higher liquidity on the counter simply becuase the company has very small equity. Of the tiny equity base of Rs 3.24 crore, the floating stock in the market is less than 30 per cent (or 1 million shares).

The expetations of sustaning this level of discounting or a further improvement is unfair unless the liquidity improves on the counter. Liquidity can be improved if the company gives a bonus issue. The company has a comfortable book value of Rs 51.70. Perhaps, a bonus issue may be on the cards.

Software stocks: Three important software companies--Infosys Technologies, Satyam Computers and Pentafour Software will be annoucing their second quarter results on Today. All these companieshad recorded an impressive jump in net profit in the first quarter of the current year. While Infosys' net went up by 157 per cent, PAT growth at Satyam Computers and Pentafour Software was also over 100 per cent during this period.

A large section of analysts feel that growth rate will be maintained in the second quarter. But the stock prices of these three companies have not moved according. In comparision of Satyam Computers and Pentafour Software, the performance of Infosys Technologies has been far from impressive. Once considered the best software stock, seems to be losing its market fancy.

While volumes on Infosys continue to move in the range of 30,000-1,80,000 shares, volumes on the counters of Satyam and Pentafour have taken a sharp leap. In fact, Pentafour have not only registered a smart growth in volumes, the stock prices is also improved smartly. While the stock is only Rs 20 away from its all time high of Rs 613, daily average volumes have also improved from 18 lakh two months ago to 72lakh recently. This clearly reflects the declining importance of Infosys Technologies as far as the software stocks are concerned. Believer of efficient market theory can shift their position to more favoured stocks.