This 100 per cent EOU has managed to do extremely well in the recent past,and the latest results have continued to maintain the recent trend. Forinstance, sales during the fourth quarter (January-March 2000) stood at Rs69.83 crore - a 51.35 per cent growth over corresponding period's figure,and an improvement of 14 per cent from its immediate quarter. Sales duringthe third quarter (October-December 1999) stood at Rs 60.87 crore. Overall,at Rs 232.67 crore, sales has grown 46.77 per cent in 1998-99.

The improvement is equally impressive on the profitability front. At Rs72.27 crore, profit at the net level jumped 79.44 per cent for the fullyear. For the fourth quarter, net profit improved by 72.53 per cent to Rs22.39 crore.

For the full year, OPM improved from 35.8 per cent to 37.83 per cent. Betterprice realisation is a prime factor for an improvement in profit margins.Improvement in net profit margins is also partly because of a reduction ininterest burden which has fallen from Rs 8.78 crore to Rs 6.92 crore. Thecompany had pre-paid a sum of 17.17 towards outstanding loans. The impactwas clearly seen in declined interest burden. On the latest earnings, theEPS works out to 72.48.

While the recent results are impressive enough, the outlook continues to bebright. The company has order book worth Rs 59 crore. The demand outlook forthe company's product is also bright. The company exports its products tocountries like US, UK, Germany, Brazil, Switzerland, and Japan.

Besides, the company is also setting up a second unit for the manufacture ofguar polymers for industrial use in Baroda. The investment is estimated atRs 10 crore which will set up an installed capacity of 1,200 tonnes perannum.

By year 2002, the company has plans to raise the capacity to 16,000 tonnesand the cost is estimated at Rs 80 crore.

As the financing would via internal accruals, the stock market need notworry about any equity dilutions. With strong cash flow, the company islikely to be a debt-free company by the end of this fiscal year.

With good export orders in hand, better prospects for its production, andimproved cash management, the company is likely to maintain profit growth innear future.

As for the stock market, on the latest earnings, the stock gets a pricemultiple of around 10. With rising profitability, and better prospects, thisis likely to improve steadily.

As for its technical position, in its earlier fall, the stock broke allmedium-term support. It fell from a peak of Rs 1539 posted during the thirdweek of January, to Rs 725 last week. For the near future, the level of Rs725 is a reference point, and any dip below this level is an indication ofan exit in the short-run. However, it manages to remain above this level,one need not worry. On the upper side, it has a resistance at around Rs 1200.