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Amtek Auto
FCCB redemption charge impacts an otherwise good performance
Standalone earnings (adjusted) grew 20% yoy to Rs496m
driven by strong revenue growth.
Subsidiary performance has improved with combined
earnings up 43% yoy to Rs482m.
Consolidated earnings rose to Rs1bn – not comparable
yoy due to the consolidation of Amtek India from this
quarter.
Order traction has substantially improved in both auto /
non-auto segments.
Appears attractive at current valuations. Maintain
OUTPERFORM.
Standalone performance – Standalone revenue grew 30%
yoy to Rs4.9bn – revenue growth was partially limited by
slower offtake from Maruti (one of its key customers).
Impacted by rising cost pressure, operating margin declined
250bps yoy to 25.3%. The company expensed the entire
redemption premium of Rs1.8bn on repayment of FCCBs
due in the quarter. As a result, reported loss for the quarter
stood at Rs898m. However, adjusted for the one-time
impact, earnings were up 20% yoy to Rs496m.
Subsidiary performance – Combined subsidiary revenue
grew 27% yoy to Rs7.5bn in 4Q FY11. Combined operating
margin declined 120bps yoy to 18%. The other JVs reported
a marginal operating profit in the quarter of Rs16m. Overall,
subsidiary earnings grew 43% yoy to Rs482m led by strong
revenue growth.
Consolidated performance – Revenue grew 71% yoy to
Rs16.3bn – not comparable yoy due to the consolidation of
Amtek India from this quarter. Excluding Amtek India,
revenue was up 29% yoy at Rs12.4bn. Consolidated margin
remained flat qoq at 22%. On a consolidated basis, adjusted
PAT grew 59% yoy to Rs1bn.
Valuation and Outlook – The order book for the company
has substantially improved with new contracts won from the
likes of Renault-Nissan, Ford, General Motors, etc. Nonauto traction has also improved with new orders from GE.
The ramp-up of the ARI JV (expected in FY13) would
provide incremental growth for the group. The impact of its
restructuring initiatives is already visible in an improved
earnings trajectory over the past few quarters. At 6.4x
FY12E earnings and at 4.6x EV/EBITDA, the stock looks
attractively valued. Maintain OUTPERFORM.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Amtek Auto
FCCB redemption charge impacts an otherwise good performance
Standalone earnings (adjusted) grew 20% yoy to Rs496m
driven by strong revenue growth.
Subsidiary performance has improved with combined
earnings up 43% yoy to Rs482m.
Consolidated earnings rose to Rs1bn – not comparable
yoy due to the consolidation of Amtek India from this
quarter.
Order traction has substantially improved in both auto /
non-auto segments.
Appears attractive at current valuations. Maintain
OUTPERFORM.
Standalone performance – Standalone revenue grew 30%
yoy to Rs4.9bn – revenue growth was partially limited by
slower offtake from Maruti (one of its key customers).
Impacted by rising cost pressure, operating margin declined
250bps yoy to 25.3%. The company expensed the entire
redemption premium of Rs1.8bn on repayment of FCCBs
due in the quarter. As a result, reported loss for the quarter
stood at Rs898m. However, adjusted for the one-time
impact, earnings were up 20% yoy to Rs496m.
Subsidiary performance – Combined subsidiary revenue
grew 27% yoy to Rs7.5bn in 4Q FY11. Combined operating
margin declined 120bps yoy to 18%. The other JVs reported
a marginal operating profit in the quarter of Rs16m. Overall,
subsidiary earnings grew 43% yoy to Rs482m led by strong
revenue growth.
Consolidated performance – Revenue grew 71% yoy to
Rs16.3bn – not comparable yoy due to the consolidation of
Amtek India from this quarter. Excluding Amtek India,
revenue was up 29% yoy at Rs12.4bn. Consolidated margin
remained flat qoq at 22%. On a consolidated basis, adjusted
PAT grew 59% yoy to Rs1bn.
Valuation and Outlook – The order book for the company
has substantially improved with new contracts won from the
likes of Renault-Nissan, Ford, General Motors, etc. Nonauto traction has also improved with new orders from GE.
The ramp-up of the ARI JV (expected in FY13) would
provide incremental growth for the group. The impact of its
restructuring initiatives is already visible in an improved
earnings trajectory over the past few quarters. At 6.4x
FY12E earnings and at 4.6x EV/EBITDA, the stock looks
attractively valued. Maintain OUTPERFORM.
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