The company which was set to manufature and supply plastic containers and caps, is the largest producer of compact disks, and CD-Roms in the country. PPL has also moved into the manufacuture of Digital Video Disks (DVDs). This shift to multimedia has proved favourable for the stock which had witnessed a peak of Rs 260 in March this year. The multimedia bussiness accounts for nearly 75 per cent of the total business, and the rest comes from the PET bottles.

The company has the capacity to produce 16.6 millions CDs with the flexibility to produce 11 million DVDs. While the present focus is mainly on CDs, with growing market for DVDs, the share is likely to grow in the near future.To improve its value chain, the company has also developed products like designer CD which has done very well. The company is also getting into music portals to enhance its value-addition chain further.

With the demand for CDs, and multimedia products is likely to grow at a faster pace, the profitability for the company is likely to show a further improvement.

While fundamentals appear positive for the stock, rumours that the company is selling off its PET business at a good price will continue to affect the stock positively. This will help the company to bring down its debt burden, which in turn will ease its interest burden.

While the stock is considered very volatile, following the technical pattern which appears promising at this juncture, may bring in good returns. After making a good base at Rs 50, the stock moved to Rs 85.5 in the first week of last month. The current move has started from a base of Rs 70 which can be used as a stop loss for long position. On the upper side, the stock is above its medium-term resistance, and the next hurdle is only at Rs 150. The long-term investors can use a stop-loss of Rs 50.