The Hindu Business Line : FD Options

Television Eighteen: An investment may be considered in the fixed deposit programme of Television Eighteen. The 9 per cent interest rate is one of the higher rates on offer and appears to compensate for the higher risks involved with the company's operations. But investors should invest only a part of the funds set aside for investment in fixed-income options; perhaps no more than 20 per cent. The revenue and earnings profile of the company has shown a steady improvement over the past year; earnings are now at healthy levels and provide for a high degree of comfort in paying interest obligations. The company operates two channels in the business news space — CNBC TV 18 in English and the recently-launched Awaaz in Hindi. It now faces intense competition from New Delhi Television. But over a one-year period, we do not perceive any significant risk to profitability.

OCL India: Investors can consider exposures in the fixed-deposit options of OCL India. The one- and the three-year options may be considered. As the two-year option does not offer any premium over the one-year option, it need not be considered. Investors could divide their exposures equally between the one- and three-year options to have flexibility in case interest rates edge up. Though the premium for the three-year option is a modest 0.25 per cent, the rate of 7.75 per cent appears attractive to lock into. . OCL India is in the business cement and related products. The company's financials are in healthy shape.

Jindal Stainless: Investment in the fixed-deposit scheme of Jindal Stainless can be considered with a one-year perspective. The demand for stainless steel is expected to catch up in unconventional user industries such as furniture, aesthetics and decorative finish 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 in operating profit margins. The increase in steel melting and cold rolling capacity is likely to bolster the volume growth, while the commissioning of ferro-alloy facilities 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.

BL RESEARCH BUREAU

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