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Shanthi Venkataraman

Jubilant Organosys: Investors can consider the fixed deposit programme of Jubilant Organosys for a one-year lock-in period. The minimum deposit is Rs 10,000 and both cumulative and non-cumulative options are available.

The company operates in the pharmaceutical, and life-science, industrial and performance chemicals areas. The rising contribution of the pharmaceutical division, which contributes 56 per cent of operating profits, augurs well for the earnings growth. The company has a high debt burden, but it has managed to cut the interest cost over the last couple of years.

On the back of increasing operating margins and better cash flows, it is now more comfortably placed to meet its interest commitments.

Jindal Stainless: Investments in the fixed deposit scheme of Jindal Stainless can be considered with a one-year perspective. Long-term tenures can, however, be avoided, as the incremental returns of 25-50 basis points are not attractive. The company makes stainless steel and other special products such as ingots, strips and ferro chrome.

The demand for stainless steel from China is likely to remain strong over the next one-to-two years. The company should be able to maintain its margins of more than 15 per cent and is well-placed to meet its current interest obligations.

JK Paper: Investors looking for a one-year lock-in period can consider the fixed deposit programme of JK Paper.

While the incremental returns from longer tenures are attractive, investing in them would be risky, given the cyclical nature of the business.

The short supply of raw material is likely to exert pressure on margins in the near term.

There are, however, indications of a further hike in domestic paper prices in the near future, in line with international paper price trends. This would ease pressure on margins. The company's focus on premium products would enable it to enjoy better price realisation levels.

KCP: A one-year investment in the fixed deposit programme of KCP can be considered. The interest rate offered by the company is superior to the other fixed deposit options available. The cumulative deposit option, which is available for a three-year tenure only may be avoided.

KCP makes cement and heavy engineering equipment. Cement now accounts for close to 60 per cent of its sales. In FY-04, its operating profits recovered, but not to the higher levels that it managed earlier.

Although interest costs have declined, there is still only a limited cushion available to absorb interest costs. Investing in the fixed deposit of the company, thus, attracts a higher degree of risk.

Demand is, however, expected to improve as infrastructure development picks up in Andhra Pradesh and Karnataka.

KCP is increasing its production of blended cement, which should improve its margins and profitability. The pick up in manufacturing sector in India augurs well for the engineering division's growth prospects.

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