Dabur India edged up today extending the recent rally in the stock.

The scrip of the pharmaceuticals major edged up 2.6% to Rs 46 on BSE. It hit a high of Rs 47.05, earlier. The stock rose on decent volumes of over 2 lakh shares.

The stock has witnessed some revival on the bourses in the last few trading sessions after it experienced a sustained fall over the last few months. From Rs 36.25 on 8 May 2003, the stock has surged 26.8% in less than a month to the current Rs 46.

Analysts have turned positive on the stock on the back of company's restructuring initiatives. In a recent reports, investment bank J M Morgan Stanley has upgraded the stock to overweight with a price target of Rs 52.

Dabur has undertaken restructuring of its operations which comprises of de-merger of the pharma business into a separate company. Thus, Dabur India would become a pure FMCG company from now on. As per the restructuring proposal, one share of the de-merged pharma company will be issued for every two existing shares of Dabur India. The de-merged pharma company will be listed as a separate company.

With this move, Dabur India's business will include personal care products, healthcare products, and ayurvedic specialities. Personal care and health care products such as hair care, oral care, tonics, digestives, child care, ayurvedic medicines and other ayurvedic products, veterinary medicines, and guar gum will come under the umbrella of the FMCG business, while the pharmaceuticals business will include allopathic and oncology formulations, and bulk drugs.

Analysts feel that following the de-merger of the pharma business, the diversion of cash from the consumer division to the pharma division will come to an end.

Also on the flip side, Dabur has significantly improved its balance sheet profile with debt reduction, improvement in working capital management and impairment of fixed assets. Dabur repaid Rs 100 crore of debt in FY 2002-03, resulting in a decline in its debt/equity ratio from 51% to 27% .