Amtek Auto

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by devang2k, Apr 2, 2015.

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  1. devang2k

    devang2k New Member

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    Can someone let me know if Amtek Auto is a good buy? I am not sure why it has hit a 52 week low , the balance sheet and growth fromlast 5 years looks very good? Is there any bad news?
     
    devang2k, Apr 2, 2015
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  2. Meenakshi Razdan

    Meenakshi Razdan Administrator Staff Member Moderator

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    I agree Amtek Auto does have a good track record. It is also quoting at an attractive P/E.

    However, one thing that may be causing worry amongst investors is the acquisition by Amtek Auto of German-based Scholz Edelstahl GmbH through its 100 percent Singapore-based subsidiary Amtek Precision Engineering Pte Limited. The Company also has a large amount of debt in the books. Also, the Q3FY15 results were so-so with a slight dip in the net profit. If Europe goes into a slow down, there would be a problem of margins and of servicing the huge debt.
     
    Meenakshi Razdan, Apr 2, 2015
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  3. bholu

    bholu Active Member

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    the entire Amtek group is heavily leveraged as pointed out correctly, infact beyond point of comfort...the new acquisition will only add to the debt...in the past we have seen how debt has hit companies badly Suzlon, Tata Steel, Hindalco...also they really have complicated ownership and holding structure which makes no sense, at least to me ...
     
    bholu, Apr 2, 2015
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  4. Meenakshi Razdan

    Meenakshi Razdan Administrator Staff Member Moderator

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    Agreed. I think the debt issue is a serious one. Why take a risk when there are so many other attractive options available.
     
    Meenakshi Razdan, Apr 3, 2015
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