The growth in the dental care segment is around 3-4 per cent in the urban market and 9-10 per cent in the rural market. However, the scope for growth in the industry is huge as consumption is very low (0.75 gm per capita) compared with the consumption in other developed nations.

Lastly, the Budget held no fears for Colgate, as the excise rationalisation exercise did not have any impact. Colgate was alreadypaying the lowest slab of 8 per cent for its dental care segment (which accounts for 90 per cent of its turnover), which has remained unchanged. All that Colgate needs to do now is take to hard sell its products and make investments in marketing and new product launches, along the line of HLL's recent Oxyfresh launch. As such steps are bound to yield positive results in the medium-term, they would be favoured by the market. The last two days' rally has improved the technical position of the stock. The stock faces resistance only at Rs 226. Till then, the run is unlikely to face major hurdles.

Kothari Products: Increased liquidity

The Kothari Products' counter no more suffers from a liquidity problem. Not only has liquidity improved, but the price, too, has risen sharply over the past one month. The stock has appreciated more than 100 per cent from Rs 102 to Rs 225. The average trading volume has also jumped from 1,000 shares to 26,000 shares. The uptrend in the stock should be attributed to theBudget proposals as it has not been harsh on pan-masala the chewing tobacco producers. The excise duty has remained unchanged, which is good news for this "Pan Parag" gutka maker. Rumours of a bonus issue have also been making an impression on the stock price. The company's performance has also impressed marketmen. Although sales growth has suffered, the company has improved its profit margins.

Compared with a 7.1 per cent growth last year at Rs 267 crore, sales during September 1998 showed a negative growth of 1.7 per cent. But what is impressive is the fact that operating profit margins have shown a significant jump. In fact, OPM has improved from 9.61 per cent to 11.82 per cent. The main factor which was responsible for this improvement was lower prices of raw materials and cost cutting. A 171 per cent jump in other income to Rs 5.48 crore has also boosted profits at the net level. Profit at the net level stood at Rs 25.08 crore, up by 41 per cent from Rs 17.77 crore in 1997. On a small equity of Rs 5crore, the earnings per share works out to over Rs 50.

As the raw material prices have been ruling at low levels and the company has been able to control its costs, margins are expected to remain firm in the near future. With the Budget leaving the sector untouched, the outlook is favourable. The company has a strong book value of over Rs 132.