Amtek Auto : End you chase for multibaggers

Fundamentally nothing has changed but is there something brewing between operators? Somebody needs to investigate.

Next multibaggers are like a jackpot the odds are against individual investors? Dont fall into such traps.

 

is it a good time to pick up Amtek Auto?

 

A

Major problem with amtek auto is its management. On one single day its market cap is down by 700 plus crores.... punters are carrying more than 1000 crs to bring down the company repo... money lenders forced to take appropriate action means loan repayment is the issue increasing debt is the issue... future growth plan and order book is uncertain.... for me fundamental are not good

 

the only concern is the DEBTS and this mainly due to the many aquisitions. Otherwise fundamentally sound, and among the top auto accessories cos in India. BUYING now would be a contrarian call.

 

I think it is confirmed that Amtek Auto is struggling to repay and service its debts and there are complaints against the promoters by the lenders. The kind of acquisitions they have made without having the internal resources was always going to hurt them. there are far better stocks in the market

 

Contrarian thinking is of the essence. There are hundreds of listed cos that are in huge debt problems in India, reasons may be several. I feel, irrational behavior has taken place in Amtek Auto, since it has been pushed out of fno also. Hence, people who were long were booking pfts / loses, while closing contracts in a hurry!
When the acquisitions were being made, stock was skyrocketting! Now the same acquisitions are seen bad by mkt participants. Irrational behavior of mkt participants, as the company isn't closing down its operations.

 

Money lenders are forced to take due action, totally agreed to fact that there are so many others listed company are in heavy debts and there management is trying to get rid of it, classic example is Suzlon Energy. Company is not stopping it's operation but important thing is they don't have enough funds/cash to run the operation and to pay interest for debts. Still there business growth and expansion is uncertain. Nothing has been clarified by the management. Expected Amtek management can address this situation to investor and clear there next course of action to deal with current crisis.

 

I m not justifying buying or staying in Amtek. I am just discussing a concept here, and can be wrong also.
There are periods of uncertainties in businesses. Sometimes it is longer than expected. The shares are trading today below their BV of Rs. 230 / share. (https://www.moneycontrol.com/india/stockpricequote/auto-ancillaries/amtekauto/AA01). In worst case scenario, even if Amtek has to be acquired, the acquirer will have to pay atleast half of this BV.
If a shareholder has bought shares for long term, then this should be seen as business partnership. So, if there are periods of uncertainty, we don't just shut down the operations and sit at home!!