The market optimism could mainly be attributed to expectations of a better-than-expected fourth quarter. Importantly, the company's performance during the third quarter was highly impressive. Cadbury had posted net sales of Rs 147.46 crore, while the operating profit stood at Rs 22.47 crore. This was marginally lower than the first half's figure of Rs 24.03 crore. Similarly, during the third quarter, net profit stood at Rs 10.35 crore, higher compared to the first half's figure of Rs 10 crore.

The company was reported to have bought forward on cocoa before the announcement of the global crop at higherprices, which led to the profit warning. Cocoa prices play a major role for Cabdury, as they account for around 40 per cent of the total raw material costs and around 35 per cent of it is imported.

However, according to industry analysts, the company is all set to report impressive results even in the fourth quarter. For the full year, while sales are expected to be in the region of Rs 480 crore, analysts are suggesting a net profit of around Rs 33 crore. Stringent cost control will help the company go a long way. This would mean an earnings per share of Rs 15. Taking the anticipated earnings figure, the price multiples for the stock work out to be just over 30, which for an MNC stock does not appear very high. Profit margins are expected to remain firm in the current year as cocoa prices have not shown a major increase. While the fundamental signals for the stock are positive, the technical position has also strengthened in the recent past, and has been hinting at a further rise. Overall, the stock isexpected to outperform the market in the near future.

Lakme: Within a period of less than two weeks, the Lamke stock has appreciated by more than 60 per cent. The company is flushed with funds on account of the Lamke brands' sale to Hindustan Lever. Rumour mills hint at a bonus issue and a buyback instead of a dividend payout. If this is to be believed, a buyback after a bonus issue certainly makes much more sense than a huge dividend payout, and will give a major boost to shareholders' value.

Although a dividend payout will also result in more cash to the shareholders, it affects the stock price once the dividend is distributed, making minimal difference to the medium-term investor. However, in the case of a buyback after a bonus issue, the shareholders will not only have higher number of shares, but the depreciation of stock prices will also be proportionately less as the buyback will keep the stock price firm in the medium term.

Dabur: The Dabur stock hit a new 52-week high of Rs 446 onFriday thanks probably to the news about the Rs 35 crore which Dabur will receive from its divestment in a joint venture called General De Confiteria. The Spanish Agrolimen group is set to purchase Dabur's 49 per cent stake in the venture, which will make it a fully owned subsidiary of the Agrolimen group. However, it would be prudent here to mention that the market could have over-reacted to the news, as the Rs 35 crore is set to accrue to Dabur over a three year period.

But on the flip side, investor confidence in the Dabur management has been on an uptrend. Earlier in the year, apprehensions about Dabur's unrelated diversifications had reflected badly on the stock price, which bottomed out at Rs 180 in February. What with the diversifications into areas as spatial as bubblegum, biscuits, cheese, readymade ethnic food pastes, snack foods, fruit juices and particularly insurance, could the investors be really blamed? However, since then a review of its operations with possible divestments from non-coreareas and a reaffirment of Dabur's strengths by Crisil have sent the stock soaring. Perhaps the most important thing has been Dabur's realisations of its core competence in herbal, ayurveda and natural products, which should help ward off the threat of drifting into more and more unrelated areas, while blindly chasing the consumer boom, ensuring all the while that the stock continues to outperform.