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The price behaviour of the Amtek Auto stock is being driven by concerns over the decisions taken by the company’s top management in the recent past, say market experts.
The scrip lost over 11 per cent on both the NSE and the BSE on Monday to close at ₹29.10 a share.
Arun Kejriwal, Founder KRIS Research, said, “The promoter does not enjoy the best of reputation among various stakeholders. His recent acquisitions are being questioned on valuation and he owes a lot of money to lenders.”
CARE Ratings had suspended ratings on the company in August citing non-cooperation. A CARE official said, “They did not cooperate with us to carry out a detailed financial analysis to bring out an updated credit opinion.”
A dealer with an Indian brokerage said “It was never a stock which was held by DIIs in their portfolios as a long-term investment. The scrip used to be picked only on trial basis most of the time,” said a dealer with an Indian brokerage.
Offering a different perspective, a fund manager with a leading fund house said, “The problem with the company is simple. Revenue has dwindled, its cash flow cycle has elongated and it has to service debt with lower income which is coming in slower than before.”
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