The Hindu Business Line : Fenner: Invest in one-year scheme

Fenner: An investment may be considered in the one-year option of Fenner (India). The rates on offer for the two- and three-year options are not attractive; the rate for the latter does not offer any premium for longer maturity. The one-year option may be considered only to park funds that may otherwise idle in a savings bank account. The minimum investment amount is Rs 5,000. Interest is paid on a quarterly basis. Fenner is in the engineering business and makes a range of products that find application in several industries. The outlook for revenue growth appears bright given the buoyant activity in the engineering and construction sectors. Though there was a dip in earnings in FY-05, they still remain at healthy levels that provide for a high degree of comfort for investors in the fixed-deposit programme.

The company's fixed deposits account for only about 65 per cent of what it entitled to accept. So investors can exhaust superior options in the FD space before contemplating adding Fenner to their FD basket.

Jindal Stainless: Investment in the fixed-deposit scheme of Jindal Stainless can be considered with a one-year perspective.

Jindal Stainless offers cumulative and non-cumulative schemes. The minimum deposit is Rs 21,000. The demand for stainless steel is expected to grow in such unconventional user industries as furniture, aesthetics and decorative finishes and shopping malls, while it is expected to remain strong in conventional sectors such as automotives, railways, white goods and construction. The company's exports, in value terms, have increased over the last one-year resulting in higher realisations.

This trend is expected to continue leading to an expansion of the operating profit margin. The increase in steel melting and cold rolling capacity is likely to bolster the volume growth, while the commissioning of the ferro alloys facility would reduce its raw materials costs. Post-restructuring, the company has been able to improve its interest cover by reducing the weighted average cost of debt.

The current cool off in steel prices appears to be a temporary blip and they are likely to settle at higher levels by third or fourth quarter.

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