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Amtek Auto Results – Insight

August 6, 2007

We at Dalal Street Business had first recommended Amtek Auto a year ago. Citigroup had recommended Amtek last month. Amtek’s results were above the street expectations.

Adjusted consolidated PAT (excluding derivative trading gains of Rs215m), rose 35% Y/Y, driven by robust top-line growth (+48% y/y), supported by c30% growth in the parent’s revenues. The result also reflects the impact of consolidation of Benda Amtek and Amtek Siccardi in this quarter. Consolidated EBITDA margins at 17.4% Y/Y, (-10bps Y/Y, -100 bps Q/Q) were affected by input cost pressures.

Stand-alone PAT after excluding derivative gains rose 21% y/y, due to strong growth in revenues. Subsidiary performance has improved substantially QoQ (YoY is irrelevant, given that the consolidation impact of Benda Amtek and Amtek Siccardi was from 1QFY07) – while revenues rose c3% QoQ, EBITDA rose 10% QoQ, driven by a margin expansion of 200bps)

Market Crashes are the best opportunity to BUY this stock. Even today when the entire market is down, Amtek is up 0.5%.

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