Company Details

Amtek Auto Ltd is one of the largest integrated automotive component manufacturers in India with a strong global

presence. The company has world class facilities in India, Europe and North America. They have significant expertise

in forging, grey and ductile iron casting, gravity and high-pressure aluminum die casting and machining and sub-

assembly. They also manufacture components for non-auto sectors such as the railways, specialty vehicles,

aerospace, agricultural and heavy earth moving equipment. The company is headquartered in New Delhi.

The company operates in one segment, which includes Automotive Components. The company's products and

services include connecting rods assly/ piston assly, case component assemblies and forging.

The Company has engineered component product portfolio including the manufacturing of complex components for

engines, transmissions, suspensions and chassis for passenger cars, Two or Three wheelers, light and heavy

commercial vehicles. In June 2013, the Company acquired Neumayer Tekfor Group. In October 2013, Amtek Auto

Limited acquired a 26.61% stake in JMT Auto Ltd.

The current market capitalization stands at Rs 3,785.06 crore. The company has reported a standalone sales of Rs

976.33 crore and a Net Profit of Rs 74.37 crore for the quarter ended Sep 2014.

Market Cap (Rs Cr) – 3785.06

Company P/E – 11.7

Industry P/E – 29.91

Book Value (Rs) – 232.46

Dividend (%) – 25 %

EPS (TTM) – 14.68

Dividend Yield (%) – 0.29%

Face Value (Rs) – 2

Shareholding Pattern

Category No. of Shares Percentage

Promoters 107,912,650 48.98

Foreign Institutions 81,757,978 37.11

Other Companies 12,162,350 5.52

Financial Institutions 9,008,256 4.09

General Public 7,297,642 3.31

NBFC and Mutual

Funds1,107,566 0.50

Others 796,699 0.36

Foreign - NRI 273,287 0.12

Foreign - OCB 1,500 0.00

Mutual Fund Name

City National Rochdale Emerg Mkts Fund(1.38%)

Mackenzie Cundill Recovery Fund(0.98%)

Market Vectors® India Small-Cap ETF(0.83%)

DFA Emerging Markets Value Portfolio(0.70%)

Vanguard Total Intl Stock Idx Fund(0.40%)

Industry Info. and Analyst Views

The valuations look reasonable at this stage. Out of 80 auto ancillary stocks, the price-to-earnings, or

PE, ratios of 63 are lower than the figure of 21.36 for the industry as a whole.

The PE ratio shows the price paid for a stock relative to earnings per share. It is used to value

companies.

Experts are bullish on this sector for 2014-15. "The outlook is bright. An uptick in the domestic auto

industry, besides a pick-up in replacement demand, will give a fillip to the auto ancillary industry," says

Silky Jain, research analyst, Nirmal Bang Securities.

Prayesh Jain, vice president research, India Infoline, echoes Silky Jain. "The trend is expected to get

stronger over the next one year as political stability emerges and global markets continue to recover

from the financial crisis. Domestic revenues, too, will pick up from the second half of 2014-15.“

FACTORS TO WATCH

"Factors to be considered while investing in auto ancillary companies are which segment they service

and its growth prospects. A diversified customer base and wide geographical presence are preferable

too. One must also look at the management's record and the company's valuation," says Jain of India

Infoline.

Yaresh Kothari, analyst, automobile, Angel Broking, says, "The economic cycle is an important factor.

One should invest at the start of an upswing in the economy and prefer companies that have a

technological edge, good brands with pricing power, strong relationships with original equipment

manufacturers and a diversified business model.“

Balance Sheet

Sep ' 13 Jun ' 12 Jun ' 11 Jun ' 10 Jun ' 09

Sources of funds

Equity share capital 43.72 44.11 46.63 40.34 28.20

Share application

money - - - 215.40 49.88

Reserves & surplus 4,754.12 4,339.18 4,219.11 3,604.47 2,514.62

Loan funds

Secured loans 5,864.77 1,535.00 1,141.76 888.08 880.42

Unsecured loans 167.41 1,964.86 2,126.13 1,827.81 2,472.09

Total 10,830.01 7,883.16 7,533.64 6,576.09 5,945.21

Uses of funds

Fixed assets

Gross block 7,386.88 4,787.38 4,106.51 3,773.93 3,003.35

Less : accumulated

depreciation 1,217.83 952.35 759.85 574.42 410.91

Net block 6,169.05 3,835.03 3,346.66 3,199.51 2,592.45

Capital work-in-

progress 1,003.39 529.16 113.85 263.30 660.25

Investments 1,810.74 1,129.06 1,106.34 745.65 493.50

Net current assets

Current assets, loans

& advances 3,203.04 4,123.44 3,411.16 2,778.80 2,567.38

Less : current

liabilities &

provisions 1,356.21 1,733.52 444.37 411.17 368.37

Total net current

assets 1,846.83 2,389.92 2,966.79 2,367.63 2,199.02

Total 10,830.01 7,883.16 7,533.64 6,576.09 5,945.21

Profit and Loss Account

Sep ' 13 Mar ' 02 Mar ' 01 Mar ' 00 Jun ' 12

Income

Operating income 3,019.38 222.23 139.91 89.66 2,310.66

Expenses

Material consumed 1,909.72 139.29 80.79 49.94 1,414.20

Manufacturing expenses 75.21 5.51 3.67 3.64 61.79

Personnel expenses 116.61 12.11 7.10 6.07 92.95

Selling expenses - 1.71 1.00 0.79 -

Administrative expenses 83.52 5.35 4.37 3.40 77.79

Cost of sales 2,185.06 163.97 96.93 63.84 1,646.72

Operating profit 834.32 58.26 42.99 25.82 663.94

Other recurring income 106.60 0.94 0.34 0.36 143.26

Adjusted PBDIT 940.91 59.20 43.33 26.18 807.20

Financial expenses 275.32 15.90 12.80 7.54 185.51

Depreciation 283.74 18.15 12.14 8.22 211.85

Other write offs - 0.26 0.51 0.37 -

Adjusted PBT 381.86 24.89 17.88 10.04 409.84

Tax charges 120.99 8.70 1.47 0.91 118.28

Adjusted PAT 260.88 16.19 16.42 9.13 291.56

Non recurring items 189.85 - -0.27 - -

Reported net profit 450.72 17.17 16.15 9.05 291.56

Earnigs before

appropriation 638.68 18.37 26.23 13.42 299.67

Equity dividend 9.86 1.55 1.26 0.99 10.15

Preference dividend - 2.16 1.13 0.74 -

Dividend tax 1.07 0.22 0.36 0.27 0.78

Retained earnings 627.75 14.44 23.48 11.42 288.74

Company Index Comparison

Dividend and Bonus History

Company Forecast

Days BSE NSE

30 200.46 200.57

50 191.43 191.43

150 217.76 217.89

200 198.48 198.61

Short Term Mid-Term Long Term

Trend Neutral Neutral Bullish

Resistance 216 264 264

Spread/Res. -17% -32% -32%

Spread/Supp. 15% 15% 34%

Support 156 156 134

Technical Indicators

MACD – Buy

RSI – Neutral

ROC –Sell

ATR - Buy

Important Ratios

PBIT – 17.61 v/s 18.42

ROCE – 6.06 v/s 7.55

Net Profit Margin – 14.41 v/s 11.88

Return on net worth – 9.39 v/s 6.55

Investment turnover – 4.29 v/s 3.98

Simple Moving Average Support and Resistance

Recommendations

Neutral on this stock

When we have better stocks with better growth potential and better fundamentals

Conclusion

I prefer Banco Products over Amtek Auto due to the following reasons :

Debt of the company is increasing

Expenses of the company is increasing

Less dividends when compared with Banco

Current assets of the company is decreasing

Better conversion of Sales Turnover into Net Profit ie Amtek had a sales turnover

of Rs.3999.7 Cr and profit of Rs.323.37 Cr while Banco had a sales turnover of

Rs.447.22 Cr and profit of Rs.66.41

Banco have a better Return on Capital Employed, Net Profit Margin, Investment

Turnover and Return on Net Worth