The falling market fancy for the stock is mainly on account ofnot-so-impressive performance by the company. Carrier Aircon which is a 51per cent subsidiary of Carrier Aircon Corporation, US has witnessed toughtimes in the recent past.

The entry of new players has made things difficult for the company.The company which has 21 per cent market share in window AC, and 35 per centshare in the split AC segment had to bring down its realisations as a partto fight off the rising competition. Meanwhile, a labour unrest whichresulted in disruption of production also had its role to play in itsperformance.

The impact was directly seen on profit margins. For the nine month periodended Decemeber, sales showed a decline of 6.03 per cent to Rs 290.75 crore.However, with cost not showing a similar drop, profit margins took a sharpbeating. For this period, OPM fallen from 9.55 per cent to 7.47 per cent. Asagainst a 6 per cent drop in revenue, total expenditure dipped by only 3.91per cent. Meanwhile, profit at the net level fell by 26.7 per cent to Rs16.93 crore.

On these earnings, the stock gets a price multiple of around 7 which appearsvery low for an MNC company having a 30 per cent market share in its sector.However, unless performance shows a sharp uptrend, discounting will continueto remain low.

As for the performance, the company has taken several steps to reduce thecost. Still, competition will keep the company's profit margins underpressure, at least in the medium term. And unless signs of an improvementare visible, the stock market will continue to treat the stock badly.The technical position too far from impressive. The stock is at its 58 monthlow, and to make a reversal from this level, it needs to show someconsolidation. Since this process would take some time, one should stayfrom this counter at this stage. The immediate resistance for the stockis at Rs 75, and the next hurdle is at around Rs 100.