Outlook: Amtek Auto, Wockhardt, Hindustan Zinc, L T Finance, Everest Industries, EID Parry :: Business Line :: Business Line

Technicals: Amtek Auto, Wockhardt, Hindustan Zinc, L T Finance, Everest Industries, EID Parry :: Business Line

52-week Blockbuster Amtek India :: Business Line

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Part of the Amtek group, Amtek India manufactures components such as connecting rod assemblies, cylinder blocks, flywheel assemblies and turbo charger housing for the auto industry. Its access to marquee clients in the two/three wheeler, car, commercial vehicle and tractor segments has helped it benefit from the continued strong demand for these vehicles after the slowdown of 2008-09. For the year ended 30 June 2011, the company reported a net sales of Rs 1383 crore and net profit of Rs 114 crore, showing a growth of 42 per cent and 50 per cent respectively over the same period last year. Despite the cost pressures that dampened operating profits across the industry, EBITDA margins for Amtek India stood at a healthy 29 per cent, around the same as the previous year. The company has continued its good run in the September 2011 quarter too. One reason for the high margins is the cost advantage arising from the integrated nature of the group’s business and higher share of machined components, subassemblies and exports in the revenue mix. Investor interest in the stock was also driven by the acquisition of a 26.25 per cent stake in the company by another group company Amtek Auto. The follow-up open offer too buttressed the stock price

Sizzling Stocks: DLF , Amtek India:: Business Line,

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Sizzling Stocks: DLF (Rs 218.6):: 

DLF jumped 10 per cent in the previous week with above average weekly volumes. It has managed to penetrate its immediate key resistance at Rs 210, which it had been struggling to do in September. Short-term trend is up for the stock from its August low of Rs 173. The stock is hovering above its 21- and 50-day moving averages. However, it is facing twin resistances (downtrend line and a resistance) in the band between Rs 225 and Rs 230. A strong breakthrough of this band will take the stock higher to Rs 250 in the medium-term.

Conversely, failure to surpass the above-said resistance can pull the stock down to Rs 210 and Rs 195. Subsequent medium-term support is pegged at Rs 175.

Amtek India (Rs 137.5)

The stock surged 11 per cent with good weekly volumes in the last week. Ever since bottoming out in the last quarter of 2008, the stock has been on a long-term uptrend. Medium as well as short-term trends are also currently up. However, the stock is currently testing its long-term resistance level at Rs 140. Its weekly relative strength index is displaying negative divergence signalling a potential trend reversal. Inability to move beyond Rs 140 will pull the stock down to Rs 120, Rs 110 and to Rs 90 in the medium-term.

But a conclusive breakthrough of Rs 140, after following a sideways move between Rs 120 and Rs 140, can lift the stock northwards to Rs 160 and to Rs 180 in the medium-term.

Amtek Auto - FCCB redemption charge impacts an otherwise good performance:Standard Chartered Research,

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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.

Buy Amtek Auto - Better times ahead:: Anand Rathi

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Amtek Auto
Better times ahead; maintain Buy
We expect Amtek Auto to benefit from sustained auto demand
locally and the nascent global recovery, along with market-share
gains overseas. Its completed organizational restructuring and
near completion of its non-auto capex are added positives. We
trim our target price from `254 to `225, while maintaining a Buy.

Standard Chartered : Buy Amtek Auto -Good show :: TARGET Rs210

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Amtek Auto  Good show


 Standalone earnings grew 66% yoy to Rs583m driven
by 130bps margin improvement to 27.9%.
 Subsidiary performance also improved, combined
earnings up 61% yoy to Rs485m.
 Consolidated earnings were up 60% yoy to Rs932m led
by 150bps yoy margin expansion to 23.1%.
 Utilisation levels for India operations stood at 60% while
that for international operations improved to 72%.
 Appears attractive at current valuations. Maintain
OUTPERFORM .