Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Ahmednagar Forgings: Bright prospects
The improving outlook for the domestic automobile industry bodes well for the auto component industry. Within is segment, the share of Ahmednagar Forgings Ltd. (AFL) (Code: 513335) (Rs.129.90) is recommended for decent gains in the medium-term.
Incorporated in 1977 and later taken over by the Amtek Group in 2003 AFL is a manufacturer of forging and machined automotive components, cold forged parts and high tensile fasteners. One of its plants at Ahmednagar also manufactures high tensile fasteners and cold-formed components. Its six manufacturing facilities are located at Ahmednagar, Chakan and Kurli in Maharashtra and at Solan in Himachal Pradesh.
The company product range includes closed die-steel forgings for the automobiles sector, connecting rods and caps, shafts & camshafts, transmission components, crankshafts, gears, forks, levers, hubs, spiders, assorted forgings and steering parts. With an expansion of 60,000 TPA at a cost of about Rs.300 crore in FY10, AFL’s forging capacity rose to of 2,25,000 TPA making it one of the largest players in the forging industry. Its products are used in the automotive, defence and railway sectors.
AFL belongs to the $1 billion Amtek Group, a frontrunner in the global automotive components industry through a number of strategic acquisitions across Asia, Europe and North America and with enhancement production levels by technological upgrades and product rationalizations. AFL is a subsidiary of Amtek Auto and that Amtek Group has 34 manufacturing units worldwide.
The company’s plant at Ahmednagar has successfully qualified for TS Certification from BVQI its the fastener division at Ahmednagar has also been accredited with the ISO certification. Its customers include Ashok Leyland, Aston Martin, Bajaj Auto, Eicher Motors, Tata Motors, Force Motors, BMW, Briggs & Stratton, CNH Global, Cummins, Fairfield Atlas, King Automotive Systems, Coventry, Letchworth, Zelter GmbH and Hennef etc. It has a global presence in USA, UK, & Germany.
For FY10 ended 30 June 2010, AFL posted 66% higher net profit of Rs.59.3 crore on 27% higher sales of Rs.634 crore. During Q2FY11 ended 31 December 2010, net profit rose 93% to Rs.28 crore on 43% higher sales of Rs.219 crore. During H1FY11, net profit of Rs.53.4 crore has advanced by 107% on 51% higher sales of Rs.421 crore while the half yearly EPS works out to Rs.14.5.
ALF’s equity capital is Rs.36.8 crore and with reserves of Rs.485.3 crore, the book value of its share works out to Rs.141. The value of its gross block is Rs.1013 crore and the debt equity ratio is 1:1. The promoters hold 55% in the equity capital, foreign holding is 16%, institutional holding is 9% and PCB hold of 7% leave 13% with the investing public.
The automobile industry is the key demand driver of forgings accounting for about 65% of the total forging production worldwide. The increased outsourcing of automotive components by global auto companies and entry of more MNC auto companies in the domestic market will propel the demand for forgings. The industry is likely to witness increased production and higher capacity utilisations due to the revival in demand in the automobile sector.
Looking at the overall long-term picture, the vehicle industry seems well poised to achieve a figure of over 3 million passenger cars by 2016. The estimates for the Indian auto components industry are US $30 -40 billion by 2015. The growth is expected to be led by exports worth US $20-22 billion by 2016. Going by these estimates, a conservative estimate (15-20%) of the production of forgings by 2016 would be to the tune of US $6.5 billion.
According to the performance report released by the Association of Forging Industry, the Rs.13,200-crore forging industry in India has registered a growth of over 71%, from 1.05 MT in 2008-09 to 1.8 MT in 2009-10 with capacity utilization expected to touch 2.3 MT by March 2011.
AFL is likely to be merged with Amtek Auto in the future. In view of the substantial gross block and a reasonable debt:equity ratio, the merger is expected to favour AFL.
In view of the global revival and sharp growth of the domestic automobile industry, AFL is expected to post a net profit of Rs.105 crore in FY11 (ending 30-06-2011), which would fetch an EPS of Rs.28.5, which EPS is expected to rise to Rs.33 in FY12.
At the CMP of Rs.129.90, the AFL share is trading at a P/E multiple of 4.6 on its FY11 estimated earnings and 4 turns its FY12 earnings. A conservative P/E ratio of even 6, will take its share price to Rs.170 in the medium-term and Rs.200 in the long-term. The 52-week high/low of the share has been Rs.210/100
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Ahmednagar Forgings: Bright prospects
The improving outlook for the domestic automobile industry bodes well for the auto component industry. Within is segment, the share of Ahmednagar Forgings Ltd. (AFL) (Code: 513335) (Rs.129.90) is recommended for decent gains in the medium-term.
Incorporated in 1977 and later taken over by the Amtek Group in 2003 AFL is a manufacturer of forging and machined automotive components, cold forged parts and high tensile fasteners. One of its plants at Ahmednagar also manufactures high tensile fasteners and cold-formed components. Its six manufacturing facilities are located at Ahmednagar, Chakan and Kurli in Maharashtra and at Solan in Himachal Pradesh.
The company product range includes closed die-steel forgings for the automobiles sector, connecting rods and caps, shafts & camshafts, transmission components, crankshafts, gears, forks, levers, hubs, spiders, assorted forgings and steering parts. With an expansion of 60,000 TPA at a cost of about Rs.300 crore in FY10, AFL’s forging capacity rose to of 2,25,000 TPA making it one of the largest players in the forging industry. Its products are used in the automotive, defence and railway sectors.
AFL belongs to the $1 billion Amtek Group, a frontrunner in the global automotive components industry through a number of strategic acquisitions across Asia, Europe and North America and with enhancement production levels by technological upgrades and product rationalizations. AFL is a subsidiary of Amtek Auto and that Amtek Group has 34 manufacturing units worldwide.
The company’s plant at Ahmednagar has successfully qualified for TS Certification from BVQI its the fastener division at Ahmednagar has also been accredited with the ISO certification. Its customers include Ashok Leyland, Aston Martin, Bajaj Auto, Eicher Motors, Tata Motors, Force Motors, BMW, Briggs & Stratton, CNH Global, Cummins, Fairfield Atlas, King Automotive Systems, Coventry, Letchworth, Zelter GmbH and Hennef etc. It has a global presence in USA, UK, & Germany.
For FY10 ended 30 June 2010, AFL posted 66% higher net profit of Rs.59.3 crore on 27% higher sales of Rs.634 crore. During Q2FY11 ended 31 December 2010, net profit rose 93% to Rs.28 crore on 43% higher sales of Rs.219 crore. During H1FY11, net profit of Rs.53.4 crore has advanced by 107% on 51% higher sales of Rs.421 crore while the half yearly EPS works out to Rs.14.5.
ALF’s equity capital is Rs.36.8 crore and with reserves of Rs.485.3 crore, the book value of its share works out to Rs.141. The value of its gross block is Rs.1013 crore and the debt equity ratio is 1:1. The promoters hold 55% in the equity capital, foreign holding is 16%, institutional holding is 9% and PCB hold of 7% leave 13% with the investing public.
The automobile industry is the key demand driver of forgings accounting for about 65% of the total forging production worldwide. The increased outsourcing of automotive components by global auto companies and entry of more MNC auto companies in the domestic market will propel the demand for forgings. The industry is likely to witness increased production and higher capacity utilisations due to the revival in demand in the automobile sector.
Looking at the overall long-term picture, the vehicle industry seems well poised to achieve a figure of over 3 million passenger cars by 2016. The estimates for the Indian auto components industry are US $30 -40 billion by 2015. The growth is expected to be led by exports worth US $20-22 billion by 2016. Going by these estimates, a conservative estimate (15-20%) of the production of forgings by 2016 would be to the tune of US $6.5 billion.
According to the performance report released by the Association of Forging Industry, the Rs.13,200-crore forging industry in India has registered a growth of over 71%, from 1.05 MT in 2008-09 to 1.8 MT in 2009-10 with capacity utilization expected to touch 2.3 MT by March 2011.
AFL is likely to be merged with Amtek Auto in the future. In view of the substantial gross block and a reasonable debt:equity ratio, the merger is expected to favour AFL.
In view of the global revival and sharp growth of the domestic automobile industry, AFL is expected to post a net profit of Rs.105 crore in FY11 (ending 30-06-2011), which would fetch an EPS of Rs.28.5, which EPS is expected to rise to Rs.33 in FY12.
At the CMP of Rs.129.90, the AFL share is trading at a P/E multiple of 4.6 on its FY11 estimated earnings and 4 turns its FY12 earnings. A conservative P/E ratio of even 6, will take its share price to Rs.170 in the medium-term and Rs.200 in the long-term. The 52-week high/low of the share has been Rs.210/100
No comments:
Post a Comment