Mukta Arts surged last week ahead of the release of the company's new Hindi feature film next month.

From a recent low of Rs 55 (Rs 5 paid-up) touched on 31 January 2003, the stock of the Subhash Ghai- promoted firm has gained 15.36% to settle at 63.45 on 7 February 2003.

The recent gains on the counter have been attributed to the forthcoming release of the company's film ‘Ek Aur Ek Gyarah' next month.

‘Ek Aur Ek Gyarah' is directed by David Dhawan. The film has Sanjay Dutt and Govinda along with Amrita Arora, Nandini Singh & Jackie Shroff. The film's music is already complete, recorded by Shankar, Ehsaan & Loy with lyrics penned by Sameer, and is set for release by 12 February 2003.

Last month, Mukta Arts sold the audio and music rights of the film for an amount of Rs 2 crore by way of minimum guarantee as royalty for a period of 15 years. "Rs 2 crore is a good sum considering the fact that there are only flops in the music market these days," a dealer with a local brokerage said.

Mukta Arts' performance in the recently concluded October-December 2002 quarter has not been very impressive, as none of its films were released during this period.

Notably, the company has extended the current accounting year to 31 March 2003. In future, the company will follow the financial year as its accounting year.

For the quarter ended December 2002, Mukta Arts posted 40% fall in sales. Correspondingly, the costs were also lower, resulting in a lower loss of Rs 2.2 million at the operating level as against a loss of Rs 6.8 million in the corresponding previous period. Other income was down by 42% to Rs 4.9 crore. While interest charges were marginal at Rs 100,000, down 28%, depreciation was down by 7% at Rs 8.2 million. With no provision for taxation (Rs 1.11 crore in the corresponding previous period) and provision of Rs 9.2 million for deferred taxation (nil), the profit after tax was down by 33% to Rs 3.84 crore.

For the twelve months ended December 2002, Mukta Arts posted 32% fall in sales to Rs 26.03 crore. Its OPM at 34.8% was much better than 15.3% recorded during the corresponding previous period, leading to a 54% jump in operating profit to Rs 9.07 crore. While OI was down 38% to Rs 7.47 crore, interest charges were 38% lower at Rs 400,000 and depreciation was up by 8% at Rs 3.13 crore. Provision for taxation was down by 94% to Rs 600,000 only. PAT was down by 4% to Rs 13.31 crore.

Meanwhile, the company said that its much-talked film to be directed by Subhash Ghai, announced on 24 October 2002, with music by A R Rahman, had its first song recorded. The film has been conceptualised as a mega-budget movie and is expected to be released by Diwali this year.

On the same day, Mukta Arts had also announced another film, to be directed by Abbas Mastan. This film is also yet to be named and the cast of the film has been finalised. The film will have music by Himesh Reshamiya with lyrics by Sameer.

Madhur Bhandarkar and Vikram Bhatt will direct films for Mukta Arts hereafter. The company is planning to make six movies in the current year. Each movie will be launched separately on the 24th of every month.