Financial Daily from THE HINDU group of publications
Sunday, Dec 21, 2003
Financial Daily from THE HINDU group of publications Sunday, Dec 21, 2003 |
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Investment World
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Fixed Deposits Columns - FD Watch Fenner India — Belt on for one year G. Madhan
The company's fundamentals have also remained strong. An investment up to one year can be considered. Beyond that, however, it can be avoided as the incremental returns are not large enough to warrant a long exposure. Scheme and features: Fenner India offers the non-cumulative fixed deposit scheme only. The rates are compounded at quarterly rests and paid at quarterly intervals. The interest rates are 7.50 per cent for one year, 7.75 per cent for two years and 8 per cent for three years. Since the interest is compounded at quarterly rests, the effective yields for the same are 7.71 per cent for one year, 8.3 per cent for two years and 8.94 per cent for three years. The minimum deposit for the scheme is Rs 5,000 and, thereafter, in multiples of Rs 1,000. Further details can be obtained from the registered office at 3, Madurai-Melakkal Road, Madurai — 625016. Business prospects: Fenner India, the associate company of J K Organisation, has a strong presence in the auto-component product market. The company makes industrial V-belts, auto belts, oil seals, power transmission products and conveyor belts. The company also designs, supplies and installs mechanical power transmission drive and material handling systems. The company caters to several original equipment manufacturers and its customers include several automobile manufacturers such as TVS Motors, Hindustan Motors, Tata Motors, Hero Honda, TAFE and Ashok Leyland. Fenner India also has presence in textiles. Given the strong revival in the auto sector, the company has good prospects for growth. Financials: Fenner India's post-tax profit fell steadily in the four years to 2001-02. However, in 2002-03, the profit-after-tax grewn 27.4 per cent to Rs 7.2 crore, over the corresponding previous year. The pre-tax profit however, rose marginally by 1.7 per cent to Rs 9.6 crore during the period. The company has reduced its debt to Rs 15 crore. The debt-equity stands at 0.48 (against 0.56 in 2001-02). However, a sharp increase in the contingent liabilities of Rs 1.6 crore (Rs 0.3 crore) is a cause for concern. Given the risk profile, an investment up to one year can be considered.
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