Amtek Auto
India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Showing posts with label Amtek Auto. Show all posts
Showing posts with label Amtek Auto. Show all posts
Friday, October 22, 2010
Saturday, August 14, 2010
Thursday, August 12, 2010
Friday, July 09, 2010
Monday, March 29, 2010
Amtek Auto
Investors with medium-term perspective can consider investing in the stock of Amtek Auto (Rs 189.7). The company is a major player in the global automotive component industry.
The stock has been on an intermediate-term uptrend from its multi-year low of Rs 42.2 touched in November 2008, forming higher peaks and higher bottoms. It encountered resistance in the band between Rs 230 and Rs 240, after retracing 38 per cent of its prior down-move in October 2009 and was on a corrective decline till January 2010.
Thereafter, the stock's decline was arrested and it began to gain bullish momentum after taking support at Rs 165 which is a key medium-term support as well as the place where the 200-day moving average is placed.
The stock emphatically penetrated the 21- and 50-day moving average compression by gaining 5 per cent on March 22. We notice that there has been an increase in volumes over the past two weeks. The daily relative strength index indicator has entered in to the bullish zone and weekly indicator is rising towards this zone from the neutral region.
Following a buy signal, the daily moving average convergence and divergence has entered in to the positive territory while the weekly MACD is already featuring in this zone.
The short and medium-term outlook is positive for the stock. We believe that it has the potential to head higher to Rs 206 in the short and then to Rs 227 in the medium-term. Investors with short and medium-term perspective can consider buying the stock with stop-loss at Rs 180 and Rs 171 respectively.
Follow up- United Breweries Holdings (Rs 268.1)
After rallying to a high of Rs 290 last week, the stock witnessed selling interest and slipped 1.5 per cent below our recommended level.
Short-term investors can avoid initiating fresh positions in this counter. However, we re-affirm our bullish medium-term outlook for this stock. Investors can hold it with the targets and stop-loss indicated last week.
via BL
Tuesday, March 02, 2010
Amtek Auto
Investors with a short-term trading perspective can buy Amtek Auto. This stock was one of the strong movers in the Budget session and closed about 8 per cent higher accompanied by strong volumes. The stock has been trudging sideways in a sleepy manner all through February and the breakout recorded on Friday has resulted in a strong close above both the 21-day and the 50-day moving averages. The stock also moved above its downtrend-line on Friday.
The intermediate-term trend in the stock is up since the November trough of Rs 43.5. That the January correction halted at 38.2 per cent retracement of this up-move denotes a strong bullish undercurrent. The stock also reversed higher from its long-term 200-day moving average last Thursday. We expect the spurt that began on the Budget day to continue to take this stock higher to Rs 192 or Rs 201. Investors can buy this stock for the short-term with stop at Rs 177.
via BL
Tuesday, September 01, 2009
Amtek Auto
We recommend a buy in the stock of Amtek Auto from a short-term perspective. It is evident from the charts of Amtek Auto that it has been on an intermediate-term uptrend since its November 2008 low of Rs 42, forming higher peaks and troughs. In July the stock took support around Rs 90 and bounced back, resuming its uptrend. Since then, the counter has been on a medium-term uptrend too. The stock penetrated its 50-day moving average in early August and is trading well above this average. We notice that there is an increase in volume over the past three trading sessions. The daily as well as weekly relative strength indices (RSI) are featuring in the bullish zone. Besides, daily and weekly moving average convergence and divergence indicators are hovering in the positive territory. Our short-term outlook on the stock is bullish. We anticipate it to move up until it hits our price target of Rs 171. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 147.
via BL
Wednesday, August 05, 2009
Friday, February 27, 2009
Amtek Auto
We recommend a buy in Amtek Auto stock from short and medium-term perspective. It is evident from the charts of Amtek Auto that following a breakthrough of the significant support at Rs 150 in October 2008, the stock witnessed sharp sell-off. It breached the significant support at Rs 100 during this decline.
The decline finally halted at Rs 42 in late November, which is also a 52-week low. The stock has been on an intermediate-term uptrend since then, forming higher tops and higher lows. The 21 and 50-day moving averages were penetrated in early February 2009 and the stock is trading well above these averages currently.
On 26 February, 7 per cent surge was recorded, accompanied with very high volume. This gain has reinforced its bullish momentum. The daily relative strength index is featuring in the bearish zone and the weekly RSI is on the brink of entering the neutral region from the bearish zone.
We are bullish on the stock from both short as well as medium-term perspective. Traders with a medium-term perspective can buy with a stop at Rs 59, with the target at Rs 100. Target for short-term is Rs 82 and the stop-loss for this time-frame should be at Rs 70.
Saturday, May 03, 2008
Thursday, April 03, 2008
Sunday, December 30, 2007
Amtek Auto
Investors with a two-three year perspective can consider fresh exposures to the Amtek Auto stock at the current market price of Rs 425. The stock, which trades at around 14 times the estimated FY-08 earnings, has cooled off considerably from its 52-week high of Rs 526 recorded in end-October. A diversified product and client base, thrust on exports and foray into the high-margin aluminium castings business inspire confidence about the company’s earnings prospects. Any decline in stock price related to the broader markets can also be used to step up exposure.
Business and Financials
Amtek Auto is in the forgings business, manufacturing engine, transmission and suspension parts and assemblies for the automobile industry. It derives 60 per cent of its revenues from clients in the four-wheeler segment. The two-wheeler and commercial vehicle segments chip in with the rest. Top customers include Maruti, Hyundai, Hero Honda, Bajaj Auto, Tata Motors, Ford and General Motors.
For the quarter-ended September 2007, standalone sales stood at Rs 311 crore, growing by 32 per cent on a year-on-year basis. While strong growth from key customers such as Maruti aided domestic sales, export sales got a boost from more outsourcing of components by its overseas subsidiaries.
A decline in overall capacity utilisation levels due to the ongoing capacity expansion took a toll on the standalone operating margins, which fell to 27.2 per cent from 30.7 per cent in the corresponding previous quarter.
Acquisitions to drive growth
The buoyancy in the domestic automobile industry, coupled with the increased outsourcing by global auto majors to low-cost countries such as India, will be the key revenue driver for the company. Besides, the company’s strategy of acquiring front-end capacities near global OEMs (original equipment manufacturers) in the US and European markets will also drive growth. This is because these acquisitions help the company adopt a ‘dual shore manufacturing model’ under which offshore locations could be used as a technical hub with emphasis on product design, development and manufacture of high-value critical components, while Indian facilities could be used in high-volume production due to their low-cost advantage. For the company, this model brings in three benefits. One, optimisation of costs and, two, product diversification and, three, added clientele.
The company’s acquisition of the assets of the UK-based JL French (Witham) Ltd in June this year is an extension of this strategy. This acquisition has added JLF’s aluminium casting business to Amtek. This augurs well for the company as OEMs are looking at substituting engine and transmission parts made of iron with aluminium, as it is lighter, stronger and more fuel-efficient.
Moreover, aluminium components also bring in better margins. During the first quarter, the company has commissioned a new facility at Ranjangaon, Maharashtra, for manufacturing aluminium castings with a capacity to produce 40,000 MT by FY-08. It plans to shift JL French’s manufacturing lines from the UK to India over the next 2-3 years.
The company is also expanding its forging and machining capacity which is expected to be completed by FY-08. This will help the domestic operations cater to 40-60 per cent of the overseas requirements, from the 20-40 per cent levels now, paving the way for increased localisation and, hence, reduced costs.
While the JLF acquisition has given access to customers such as Peugeot, Land Rover and Jaguar, the acquisition of the precision machining companies — Triplex components and Kelton — based in the UK in November this year has also brought in customers such as Dana Spicer, Honeywell, Perkins, TRW and Toyota (UK).
Likely boost from exports, re-rating
The company derives around 55 per cent of its revenues from overseas and given the increasing opportunities for outsourcing, exports are likely to receive a fillip. Besides, a majority of its exports are to Europe with the US bringing in less than 5 per cent of the revenues thus reducing the risk of losses due to depreciation of the dollar against the rupee.
The consolidation of Amtek Auto with Amtek India, a group company manufacturing castings, is also on the cards. Synergies from consolidation such as product line expansion, economies of scale and settlement of issues relating to transfer pricing between the group companies (Amtek India and its subsidiary Sigmacast Iron supply castings to two of Amtek Auto’s subsidiaries), are expected to trigger a re-rating for the stock.
Friday, November 30, 2007
Sunday, November 04, 2007
Sunday, June 10, 2007
Amtek Auto
AMTEK AUTO: The company continues to pick up assets and clients and could soon end up being India’s biggest auto parts maker.
Striking when the iron’s hot. That’s something Amtek Auto, India’s second largest auto components maker, has been doing quite well.
Over the past seven years, the Delhi-based firm, which is expected to post revenues of Rs 4,000 crore plus in FY07, has made six overseas acquistions, giving it 10 manufacturing bases overseas. It’s no surprise that Amtek’s stock price has appreciated ten-fold over the last five years from just Rs 40 to Rs 420 today.
Amtek Auto’s latest buy is an aluminium foundry in the UK, with a capacity of about 20,000 tonnes per annum. At $35 million, the deal is valued at around 0.6 times sales.
That doesn’t seem too high a price even if JL French (Witham) – the seller – is in deep trouble, and its plant running at just over half the capacity. It posted revenues of around $60 million last year and barely managed to stay out of the red.
What’s more, as Ramnath S, who tracks the automobile space at SSKI Securities, points out, “JL French has capabilities in product design, high pressure die casting and precision machining. Also, Amtek gets some brand new customers like PSA Peugeot, a top of the line name.”
Like it has done with assets that it bought out earlier, this time too Amtek will shift JL French’s 18 production lines back to its Pune plant over the next three to four years. The idea is to make cheaper aluminum castings which are used extensively by the automotive industry.
Says Santosh Singhi, CFO,“ Once we shift the entire capacity back home, we will have a total of 40,000 tpa and that should give us better economies of scale. In any case, we should save at least 30-35 per cent on labour costs by manuafcturing in India rather than in the UK.”
Adds Ramnath, “It should be possible to scale up the operations of the JL French facility with minimum capital expenditure.” Indeed, Singhi believes that once production is ramped up to match the capacity, profits from the JL French unit should be close to $10 million compared with less than $ 1 million currently.
In fact, that’s precisely why Ford Motor, one of JL French’s bigger customers, recommended that Witham sell off the assets. Ford even agreed to up prices by about 3-4 per cent so that the unit could become more profitable.
Explains Arvind Dham, chairman, Amtek “In such deals, it’s important to have the approval of key customers. Besides, customers realise there has to be some solution to the problem, so they’re willing to look at price hikes.”
So while Ford can surely hope to source cheaper components from Amtek, the Indian firm’s client list, which already boasts of marquee names such as BMW, Hyundai, CNH Global, Scania, Delco Machining, Land Rover and Renault, should also gain from the company’s more efficient operations. Umesh Karne of Emkay Securities expects Amtek’s operating margins to expand by at least 200 basis points in the next two years.
Currently, over 70 per cent of Amtek’s consolidated revenues come from sale of components to passenger car makers. With a new set of customers, this share could go up further.
Meanwhile, Dham talks about a merger between Amtek Auto, in which the promoters have 33 per cent and Amtek India, also an auto ancillary firm, in which they have 38 per cent. “We have been doing some re-organising because we have so many companies and a merger is on the cards,”he explains.
So, will Amtek overtake Bharat Forge to become India’s biggest component maker? Dham asserts that he doesn’t want to make comparisons but says Amtek is hoping to achieve a turnover of Rs 7,000 crore in three years, using both the organic and inorganic routes.
For perspective, market leader Bharat Forge posted consolidated revenues of Rs 4,178 crore in FY07. While Amtek Auto should register sales of around Rs 4,000 crore for the year ending June 2007, the numbers are not comparable because Amtek’s revenues include several inter-segment transfers.
Says Karne, “Amtek may not become bigger than Bharat Forge, unless it does more acquistions than the latter, but it should remain a very close second.” No mean achievement this.
Thursday, June 07, 2007
Wednesday, May 16, 2007
Saturday, May 12, 2007
Subscribe to:
Posts (Atom)