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G. Madhan

THE fixed deposit programme of Jindal Stainless is open for investment. Investors can park their money in the one-year option, considering the company's strong fundamentals and the attractive interest rates. Longer tenures, however, can be avoided considering the fluid interest rate scenario and the higher minimum deposit requirement. Senior citizens can consider this option after exhausting the Senior Citizen Scheme, which offers a 9 per cent interest rate, and the Post-Office Monthly Income Scheme.

Scheme features: Jindal Stainless accepts cumulative and non-cumulative deposits. The rates are the same for both — 7 per cent for one year, 7.25 per cent for two years and 7.5 per cent for three years. Since the cumulative scheme is compounded at quarterly rests, the annual yields for the same are 7.19 per cent for one year, 7.73 per cent for two years and 8.32 per cent for three years.

The interest on non-cumulative deposits is paid at quarterly intervals. An additional 0.25 per cent interest rate is offered to senior citizens, shareholders of the company with a minimum of 100 shares, and employees. The minimum deposit is Rs 21,000. Further details can be had from the company's registered office at Delhi Road, Hissar — 125 005 (Haryana).

Business prospects: Jindal Stainless, a Jindal group company, makes stainless steel and other special products such as ingots, slabs, blooms, plates, ferro chrome, blade steel and coin blanks. Over 45 per cent of the revenue comes from exports.

The company is to increase its exports by 50,000 tonnes in fiscal 2004-05. For this, it has entered into a long-term marketing agreement with the Chinese State-owned trading house — Minmetals Steel Company. Given the firm international and domestic stainless steel prices and the continuing demand for stainless steel in the overseas market, particularly China, the company has good prospects for growth.

Financials: The company's revenue growth has been robust during the last year. The trend continued in the first quarter of 2004-05 as well. In the quarter-ended June, the net sales grew 19.3 per cent to Rs 643.2 crore over the corresponding previous period.

Profits, at the operating level, also rose by 20 per cent to Rs 110.5 crore. Growth in profits at the net level, however, was down 7 per cent to Rs 50.1 crore. This was due to the sharp increase in the deferred taxes.

Margins at the operating level remained the same at around 17 per cent. At the net level, margins declined by 0.9 percentage points to 7.8 per cent. The interest coverage ratio is at 10.4 in FY'04 (as against 2.6 in FY'03). The debt-equity ratio is at 1.4 (1.9).

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