The topline has leapfrogged to Rs 728.26 crore from Rs 463 crore in the corresponding quarter of the previous year. The company has notched up excellent volume growth as well for the quarter. This is commendable considering the higher base of last few quarters. It has been able to sell 2,39,542 motorbikes as compared to 1,61,466 bikes in the corresponding period last year. The consumer preference remains strongly in favour of motorbikes as compared to scooters. Motorbike sales outclass scooters by a huge margin. Motorcycles have shown a growth of 31 per cent as compared to the negative growth of 1.3 per cent for scooters in the first couple of months of the present fiscal. Hero Honda has done well to have been able to maintain its grip over the market. In the segment that it operates, introduction of newer variants and brand building are key to sustaining of market share. The company has done extremely well on both these counts.

The model CBZ, which propelled the last quarter sales of the company, has beendoing exceedingly well in the present quarter as well.

The bottomline has leapfrogged by 60 per cent to Rs 60.30 crore from Rs 37.81 crore in the corresponding quarter of the previous year. The company has been able to sustain its operating profit margins. The EPS too has consequently risen to Rs 15.1 for the quarter. The markets, have remained cold to the company despite excellent financials of late. However, the present showing of sustained growth at higher levels could enhance the prospects of a better discounting for the company.

Morepen Laboratories
Morepen Laboratories has registered a spirited performance for the first quarter of the present fiscal. During the quarter ended June 30, 2000, sales grew to Rs 106 crore from Rs 71 crore in the corresponding quarter of the previous year. While sales were up by 50 per cent, raw material expenses increased by only 34.8 per cent to Rs 59.6 crore. This enabled the company to register operating profit margins rarely found in bulk drug companies.

The operating margin stood at 34.2 per cent, up from 26.19 per cent. Major decline in raw material cost provided cushion for large operating margin, and enabled the absorption of 70 per cent rise in interest charges without denting the margins. The net profit registered a growth of 119 per cent to Rs 20.4 crore despite the rise in interest cost from Rs 5.8 crore to Rs 9.9 crore.

The company claims that it is the largest manufacturer of generic drugs and fourth largest seller of anti-histamine drug Loratadine. It expects higher contribution in sales from Loratadine as it has recently received approval from the US Food and Drugs Administration (FDA).The company has a strategy of filing Abbreviated New Drug Application (ANDA) of those products which are going off patent. The company wants to become first generic company after the original patent holder to file ANDAs and wants to remain ahead of its competitors. There is normally a difference of six months between the filing by first generic company and the next one. During this period, the generic company can sell the products at a very large premium. Clearly by filling first ANDA in some drugs, the company has set its sights at a very high level. The company plans to introduce new products every year.

Presently, the company is working on 20 products in their R&D and patent for all these products will expire between 2001 and 2010. The company is also exploring other avenues of business like contract manufacturing and also plans to go for a US listing.

Cadbury India The "khane walo ko khane ka bahana chahiye" ad campaign has not been able to make a positive impact on the topline of Cadbury for the quarter ended June 2000. The topline of the company was up by 13 per cent to Rs 107 crore from Rs 94 crore in the corresponding quarter of the previous year.Even though the second quarter is a slack season for the company, the performance for the quarter ended June 1999 was comparatively better resulting in topline growth of 24 per cent when compared with the quarter ended June 1998.

The company has benefited from the fall in the international prices of cocoa, its major raw material, from $1750 per tonne to $950 per tonne. Also, it had embarked on a cost-cutting exercise, thereby reducing unnecessary expenditure. The operating expenditure, as a result, has risen by only 9 per cent to Rs 91 crore from Rs 83 crore in the corresponding quarter of the previous year.

Cadbury has very little debt in its books due to which the interest cost in this quarter is a minuscule Rs 68 lakh, down from Rs 89 lakh in the corresponding quarter of the previous year. The debt equity ratio of the company stood at 1:20 as on the last day of the previous year.

The net profit of Cadbury has gone up by a phenomenal 88 per cent from Rs 4.57 crore to Rs 8.61 crore. However, the net profit was high due to a writeback of provisions made in the corresponding quarter of the previous year to the extent of Rs 1.4 crore and were no longer required. The growth in the net profit without the extraordinary items comes to 21 per cent.The company has been very aggressive in marketing and has launched many new products as well as different sizes of old products in the market. Also, one of its latest product Picnic is being promoted as a filling meal. The company's vision is to have a Cadbury in everyone's pocket.

However, the going may be very tough for the company due to stiff competition from Nestle and also from other players like Mars and Hershey's which may create a dent in its market share.

KSESH (with contributions from Sachchidanand Shukla, Dhruv Rathi and Prashant Kothari)