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Amtek Auto – Consolidation Amidst Weak Results

August 4, 2008

Amtek Auto has announced the consolidation of all group companies into itself amidst declaring weak results. Consolidated earnings after minority interest including gain on sale of shares (net of losses on forex hedges) of Rs 305 mm came in at Rs 1,070 mm. Lower operating margin at 15.5%. Adjusted net earnings after minority interest of Rs 765 mm were 22% below last year’s Rs 981 mm; depreciation was up 39% to Rs 584 mm and interest was up 19% to Rs 300 mm..

Amtek Group Consolidation:
44 shares in Amtek Auto for every 100 shares held in Amtek India.
56 shares in Amtek Auto for every 100 shares held in Ahmednagar Forgings.
5 shares in Amtek Auto for every 100 shares held in Amtek Castings.

We will revert back ASAP once we have all the details of Equity Dilution and consolidated Earnings estimate. We recommend a HOLD and Accumulate at lower levels with an investment horizon of 18 months.

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