52-week Blockbuster Amtek India

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.