The first-half results are an indication of things to come. For the period ended September 1998, net profit has more than doubled to Rs 14.10 crore on a 78 per cent growth in sales to Rs 49.07 crore. With huge export orders on hand and the fruits of the expansion drive accruing this year, the company is likely to see its full-year bottomline rising by 50-60 per cent. A few market players are of the opinion that earning per share could bloat to Rs 50 compared with less than Rs 30 at present.

Even the annual report of 1997-98 speaks of a steady business growth in fiscal 1998-99. The report states, ``With the acceptance of newly developed products in the international market, weare confident of a steady growth in business.'' The increased profitability makes a case for the rise in scrip price, but a technical correction cannot be ruled out in the short-term.

Vikas WSP produces guar gum polymers and its derivatives, which finds an extensive use in food, textiles, mining, oil drilling, tanning and cosmetic sector. The company has a locational advantage of being situated near the guar farming area of Sri Ganganagar in Rajasthan and Siwani in Haryana.This reduces brokerage and transportation cost as the company buys directly from the farmers. Vikas WSP also has one of the lowest labour cost as well as sales and administrative expenses. This explains the high operating profit margin of 38.2 per cent.

The company has been increasing its capacity, ever since it came out with its first public issue at par in December 1993. The capacity for guar gum polymers was enhanced from 4000 tpa to 12,600 tpa (including derivatives) and that for Guar Splits from 5000 tpa to 10,000 tpa. The capacityfor the polymers was further raised to 21,000 tpa in July 1996 and that for splits to 18,400 tpa in November 1996. Further expansion of the polymer capacity by 18,900 tpa will yield results from November/December this year with the arrival of new guar seeds. This will boost turnover in the second-half.