Operating profit has gone up by 16 per cent to Rs 53.98 crore from Rs 46.5 crore last year. While operating margins have remained stagnant at 14.3 per cent, net profit margins have improved from 6.29 per cent to 7.64 per cent during the period.

Despite the jump in its bottomline growth, the Cadbury stock reacted negatively to the unaudited financial results on Thursday. After touching a high at Rs 830, the share price closed at Rs 769 on the BSE, a 4.4 per cent drop against its previous close at Rs 805.

The company said in a statement: ``These results have been achieved in the face of difficult market conditions. We continue to invest significantly in our brands and in the market place. Diwali sales will happen in the fourth quarter this year as against the third quarter last year.''

Other income of the company has gone up substantially from Rs 2.25 crore in the previos year to Rs 6.54 crore in the nine-month period. The other income includes profit on transfer of surplus land, the company has said.

Interest charges have dropped to Rs 2.96 crore from Rs 5.21 crore during the period. Depreciation was higher at Rs 15.10 crore against Rs 14.74 crore, and the provision for taxation increased to Rs 13.6 crore from Rs 8.45 crore.

During the third quarter period ended October 10, 1999, the company reported a 31.6 per cent rise in net profit to Rs 13.62 crore as compared to Rs 10.35 crore in the corresponding period last year. Net sales during the third quarter period increased 13 per cent to Rs 166.77 crore from Rs 147.46 crore last year. Operating profit has increased by 8 per cent to Rs 24.33 crore from Rs 22.47 crore last year.

The company works on 13 periods basis per annum, and the third quarter period has four periods.

On an annualised basis, earnings per share have increased to Rs 22.8 from Rs 17.2.

While operating margins have dropped marginally to 14.58 per cent from 15.23 per cent, net profit margins have climbed up to 8.2 per cent from 7 per cent last year.

rural push holds promise
As projected, Cadbury has once again managed to overhaul its last years annual net profit of Rs 26.02 crore, by the third quarter itself. In fact, net profits for the nine-month period ended October 10, 1999 reflect a 41.82 per cent growth over the corresponding period for the previous year.

However, one fact which takes some sheen off the company's performance is that other income as a percentage of PBT has increased from 7.81 per cent to 15.40 per cent during the nine month period. This incidentally is due to some profit on trasnfer of surplus land.

Another worrying aspect for Cadbury is the sqeeze on margins in the third quarter, where operating margins have actually dipped from 15.24 per cent to 14.59 per cent. This is largely due to Cadbury purchaing cocoa against long term forward contracts last year when prices were higher.

But this hic-up aside Cadbury looks well set to continue its dominance with a 70 per cent market share in the chocolate confectionery market. Volume growth will also accrue due to increased capacities and the onset of the festive season in the fourth quarter. The strategy to extend its sugar confectionery range into value added products and increased distribution reach including the rural push, also augur well for the future.