However, for the past four weeks, there have been attempts to regain itslost ground. For the last couple of weeks, the stock has managed to posthigher bottoms which is a positive indication as far as its technicalposition goes. Meanwhile, this improvement in price has been accompanied bya substantial jump in volume which is again a positive signal.

As for the fundamentals, for the second quarter, results are notdiscouraging. Although sales have been lower in comparison to the firstquarter, there has been an improvement on profit margin front. Sales for thesecond quarter (July-September 1999) stood at Rs 467.62 crore, down from Rs492.45 crore in the first quarter. Even if one were to compare the figurewith the corresponding period in the previous year, there has been a drop insales. Sales during the corresponding period stood at Rs 486.62 crore.

However, for the first half, the year on year growth has been 5 per cent.For the full year 1998-99, the company has achieved a 11 per cent growth. Assuch, unless sales improve in the second half, the current year may not beas good as last year as far as the growth in sales is concerned. Nothing butstiff competition especially from the foreign brands have been the primefactor affecting the sales growth.

But better margins show that the company has able to improve the quality ofearnings. For the first half, OPM improved from 8.18 per cent to 9.11 percent. Cost reduction with an improvement in logistics managements has playedan important role, and is responsible for improvement profit margins. Theimprovement has been more during the second quarter. For the first quarterOPM stood at 9.04 per cent which improved to 9.19 per cent during the secondquarter.

For BPL, the outlook remains positive despite stiff competition in the CTVmarket from the domestic as well as the new foreign brands. BPL hasstrengthened its position last year, and maintaining its place with the helpof its strong dealer network will not be a problem. Last year, its marketshare grew to 24.75 per cent.

For the current year, the company is aiming at 27 per cent market share inCTV market which is expected to grow by 35 per cent. Its alkaline batterydivision is also doing well, and a further improvement is expected. As onthe profitability front, reduced cost, and better fund management, is likelyto give a push to its bottomline.

From the stock markets point of view, on the latest earnings (Rs 35.57annualised), the stock gets a price multiple of around 10 which reasonable.However, with improved financials, the valuation is likely to improve in themedium term.

From the technical point of view, the stock broke all the support levelsduring the month of October. The bottom made during last month should now beused as a reference point which is at Rs 312. The position would worsen ifit breaks this level. Unless it breaks this level, the medium term investorscan remain invested.

Deepak Singh Tanwar