Amtek Auto recovers on bargain hunting after recent sell-off

Amtek Auto rose 6.35% to Rs 67.80 at 09:39 IST on BSE on bargain hunting after sliding 57.28% in preceding four trading days.

Meanwhile, the BSE Sensex was down 353.41 points, or 1.28%, to 27,254.41

The stock gained on high volumes. On BSE, so far 24.17 lakh shares were traded in the counter, compared with an average volume of 7.78 lakh shares in the past one quarter.

The stock hit a high of Rs 71.75 and low of Rs 59.10 so far during the day. The stock had hit a 52-week low of Rs 50.70 in intraday trade yesterday, 20 August 2015. The stock had hit a 52-week high of Rs 266 on 12 September 2014.

The stock had underperformed the market over the past one month till 20 August 2015, falling 62.3% compared with 2.86% fall in the Sensex. The scrip had also underperformed the market in past one quarter, falling 57.95% as against Sensex's 0.82% decline.

The small-cap company has an equity capital of Rs 44.06 crore. Face value per share is Rs 2.

Shares of Amtek Auto have dropped 57.28% in preceding four trading days to settle at Rs 63.75 yesterday, 20 August 2015 from a recent high of Rs 149.25 on 14 August 2015.

Bulk of the fall came in last two days. The stock dropped 28.37% yesterday, 20 August 2015 after the sliding 30.77% on 19 August 2015. The sharp slide in the stock materialized after the National Stock Exchange (NSE) early this week announced that the bourse has decided to exclude the Amtek Auto stock from its equity derivatives segment. The NSE in a circular issued after trading hours on 18 August 2015 announced that the bourse has decided to exclude the Amtek Auto stock from its equity derivatives segment based on the stock selection/exclusion criteria prescribed by Securities and Exchange Board of India (Sebi). NSE said that derivatives contracts for new expiry months in Amtek Auto will not be issued on expiry of existing contract months.

Meanwhile, with reference to the news article captioned Amtek Auto shares down around 70% in a month on debt worries, Amtek Auto clarified after market hours yesterday, 20 August 2015, that as disclosed in Q1 June 2015 results, there is decline in the operational performance of the company due to current market scenario which caused decline in the sales and profit margins of the company. There is temporary cash flow mismatch in the company and to mitigate the present situation, the promoters have already infused Rs 75 crore and if required in future will also infuse more funds. The company is also exploring various means of fund raising, Amtek Auto said.

Apart from exclusion of shares of the company from the futures and options (F&O) segment, the company is not aware of any reasons of the significant single day fall in the stock price of the company, Amtek Auto said.

The management remains confident in the company's abilities to capitalize on opportunities arising out of a stronger recovery in the Indian automobile industry over the quarters to come. The management re-iterates that the long term fundamentals of the company remain strong, Amtek Auto said.

Amtek Auto reported net loss of Rs 157.60 crore in Q3 June 2015 as against net profit of Rs 86.08 crore in Q3 June 2014. Net sales declined 12.7% to Rs 854.22 crore in Q3 June 2015 over Q3 June 2014.

Amtek Auto is one of the largest integrated automotive component manufacturers in India with a strong global presence. Amtek Auto has a presence in forging, grey and ductile iron casting, gravity and high-pressure aluminum die casting and machining and sub-assembly. The company also manufactures components for non-auto sectors such as the railways, specialty vehicles, aerospace, agricultural and heavy earth moving equipment. The company has manufacturing facilities in India, Europe and North America.

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