Amtek India - - is it another hidden goldmine?

Rakesh had posted a comment on a previous blog, seeking views on Amtek India. In a rather nonchalant manner I was examining the stock stats. Infact let me put down the stupid comments I was about to post ...

"Hi Rakesh, I checked out Amtek India. You may have something here. The stock is currently trading at a fwdP/E of 10.4 which is rather good. Though it doesn't have any margin of safety to speak of and a low dividend yield of 0.4% - I like the fact that it is growing at 25% year on year in Sales and Profits and fantastic management."

Repeat : it doesn't have any margin of safety to speak of

A look at the balance sheet may give a different picture. Annual Report. Pg 29 .. under Investments, reads 9675095 shares of Amtek Auto Ltd. of Rs. 2/- each .... amount 3511.2 lacs. So each share of Amtek Auto is being evaluated at rupees 36.29 only. The current price of the same Amtek Auto share (Feb 16th) is 302.00 rupees on the NSE. Which means, investments on the basis of this one holding itself is atleast INR 29,218.78 lacs (292.18 crores).

292.18 crores is exactly 50% of the current m-cap of Amtek India (587.86 crs).

There is my margin of safety.

Moral of the story ... always, always read the annual reports !!!!