Amtek India

My last post on Amtek India was way back in Feb '06. (here) Amtek was priced at 100 rupees then and reached a high of 207 rupees. It's currently lingering at around 165 rupees for a 2-rupee share. Part of the reason for this mispricing may be the overall investor apathy to the auto and auto component sector.

The financials of Amtek India are enclosed -
Share capital : Rs. 18.40 crs
Loans : Rs. 621 crs
Investments : Rs. 54 crs
Net CA : Rs. 317 crs
FV per share : Rs. 2
Dividend per share : Re. 1
LY profits : Rs. 66 crs

For the year closing Jun 2007, the company profits are expected at about 120 crs. The profits and sales have risen by 100% in the last one year. Even if we assume a profit level of 120 crs for the next year, the fwdPE for Amtek India will be a comfortable 12.50.

The margin of safety for Amtek India will be the 96,75,095 shares of Amtek Auto that they have, as per the 2004-05 annual report. I havent read the 2005-06 annual report (pdf, 14.4 MB) but if we assume the number of shares stay at this number ... the latent value of Amtek Auto shares (CMP as on 13th Aug : Rs. 375) would be a monstrous Rs. 362.8 crores. In other words, this contributes 20% to the value of the Amtek India share.

Fundamentally, the auto component industry in India is extremely strong. With cost, being a priority for global manufacturers .. multiple players are looking at India as a sourcing base and setting up plants to feed the masses's demand for transportation.

An assessment of Amtek Auto will also equally useful ... if anyone has any info on the same, pls let me know.