Jindal Stainless exports look up 60% in '04

Jindal Stainless has posted a 60 per cent growth in exports to an all-time high of $210 million in 2003-04. The company hopes exports will grow at 10-20 per cent during the current financial year.

The company, part of the $2 billion Jindal group, has also slashed the average interest cost of its debt to Rs 10-12 crore from Rs 130 crore in the last three years by converting a large portion of its rupee debt into dollars, Arvind Parakh, director (finance), Jindal Stainless said.

"We had the best year in 2003-04. Due to the appreciating rupee, we have converted a large portion of our rupee debt into dollars. This has helped us bring down average interest costs," Parakh said.

Jindal Stainless has a long-term debt of Rs 500 crore, of which 60 per cent is in dollars. Of the total working capital, 90 per cent (Rs 150-200 crore) has been converted into foreign currency, he said.

Parakh said this has been done as the company expects the rupee to have an upward bias in the medium to long term due to strong dollar inflows, especially after the disinvestment of the public sector units.

"We have 50-60 per cent of our incremental debt in dollars while 35-40 per cent is in rupee in order to manage the risk," he added. The company exports its stainless steel products to southeast Asia, China and Singapore. Its imports amounted to about $110 million during 2003-04.

Jindal Stainless has implemented an active risk management policy to take care of its financials following the appreciation of the rupee.

"With the appreciating rupee, we tried to balance out in terms of imports by converting more of it in rupee than dollars as it works out to be cheaper," Parakh said.

He said various steps like interest rate swaps and dollars forward were used to contain any impact of the rising rupee.

Jindal Stainless has ordered critical imports worth 15 million to 20 million euros from Europe for its upcoming plant in Duburi (Orissa).