However, on the bourses, Swaraj Engines enjoys a much better discounting than Punjab Tractors. Punjab Tractor's stock at its current market price of Rs 1440 discounts the latest annualised EPS of Rs 69.13 by a price earning multiple of just over 20. At the same time, Swaraj Engines, at Rs 860, discounts the latest annualised EPS of Rs 38.4 by a price earning multiple of over 26. The two stocks are trading close to their 52-week highs and a consistent performance should see them scale new highs over the coming months.

Owing to good demand, the tractor segment has seen a consistent growth over the past few years and the prospects look even brighter for the coming years. As a result of the consistent demand and impetus provided through budget sops for agriculture, the industry in the first-quarter grew by 8.3 per cent from 63,689 units to 68,974 units. However, Punjab Tractors grew at a much faster pace, with the number of units growing by 17.7 per cent or 2,126 units to 14,134 units. As a result, its market share has grown from 18.9 per cent to 20.5 per cent. Buoyed by their encouraging performance, Punjab Tractors and Swaraj Engines have have announced an interim dividend Rs 6.5 and Rs 5.5 per share. For the year ended March 1999, Punjab Tractors emerged as a major player in the tractors segment with its market share increasing by 2.5 per cent on the back of overall increased sales of 19.56 per cent to 48,336 tractors.

On the financial front, Punjab Tractors, on the back of a 16.2 per cent growth in revenue, has reported a 22 per cent jump in cash profit. Even after higher tax provision, net profit in the first-quarter has improved by 25.4 per cent from Rs 27.9 crore to Rs 35 crore. The company's earnings over the years has matched the increasing equity as a result of frequent bonuses. As a result, the earning per share has hardly been affected. The reserves still stand at Rs 278.4 crore on a equity base of Rs 20.25 crore, thereby yielding a high book value of around Rs 139.

On the other hand, growth at Swaraj Engines has been led by a 21 per cent growth in topline. The turnover has grown from Rs 27.38 crore to Rs 33.15 crore, thereby leading to a 31 per cent growth in cash profit from Rs 4.50 crore to Rs 5.9 crore. Swaraj Engines has a relatively very low equity of Rs 4.14 crore and has a reserve pile of Rs 27.74 crore, which yields a high book value of Rs 77.