This clearly indicates the fact that product ranges in most FMCG companies have moved up the value scale largely through packaging innovations and focused marketing and the story at P&G is no different. In fact, it has been the effective managing of material costs and efficient marketing based on better consumer understanding, that has helped improve operating margins at P&G for the nine month period from 18.19 per cent to 20.21 per cent.

The company has also been retiring high cost debt and analysts state, that interest costs will come down further as most of P&G's capexhas already been incurred and a substantial portion of its future cash flows will be used to repay borrowings. A lower effective tax rate from 22.89 per cent to 19 per cent for nine months ended March 1999, further reflect the efficient tax management of the company. In fact, P&G is expected to have a low tax liability for another two years, largely because of the Rs 100 crore expansion, a major part of which is being done at Goa and enjoys a 5-year income tax holiday.

However, it would be prudent to point out here that P&G's buoyant bottomline, camofalgues a worrying factor for most investors, which has been the flat topline growth. A fact mirrored in the single digit revenue growth of 9.14 per cent to Rs 371.42 crore for nine months ended March 1999. But P&G is now trying to remedy the situation with a re-alignment of its core businesses in healthcare and feminine hygiene. In line with this strategy is the sale of its anti-lice treatment shampoo Mediker to Marico for a consideration of Rs 10 crore. Thisanalysts state will further help P&G retire its borrowings.

The marketing tie-up with Marico for Old Spice and Clearasil should also help P&G push these two brands which had shown a decline in sales in 1997-98. P&G's ad-spend in the last year was Rs 25 crore, an expenditure well deserved as the company has acquired a market leadership position in the feminine hygiene care market by displacing former leader Johnson & Johnson.

However, one probable hitch to future growth could be the 100 per cent subsidiary P&G Home Products - which is owned by the parent. According to analysts, the parent may introduce new products through this unit, reducing the importance of P&G India. In fact, it is perhaps the uncertainty associated with P&G Home Products, coupled with the flat topline revenue curve which has led to the stock underperforming the market in recent times.

But given the company's refocus on healthcare and feminine hygiene, the market will have little option but to re-rate the stock.

A Sensexrecovery: Hectic buying, especially in the second half of the day, has resulted in a sharp recovery on Wednesday with the market recovering 30 points. Most of the software counters which were at the down circuit in the morning, by the close of the day, managed to touch the upper limit. With the sensex taking a U-turn from the crucial level of 3183 points, a question that begs to be answered is: Has the market bottomed out?

As far as the impact of the negative news goes, the answer is yes. The fact that the recent fall had little to do with fundamentals also favours the optimism. What drove the market down was nothing but the political developments. And on that front, all the possible negative news already seems to have been factored in the current prices. The only negative factor which is likely to create any further impact could be the delay in elections. But even in that scenario, the fall from the current level may not be much, feel experts. At worst, the market may move sideways. Thus for long terminvestors, though selectively, it is the right time to take a plunge into the market. This is simply because the market is expected to start its uptrend once the date of election is announced. The speed of the southward journey should be accelerated during the time of election.