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Accumulate Amtek Auto, target of Rs 110: Angel Broking
Angel Broking has recommended an accumulate rating on Amtek Auto with a price target of Rs 110. At Rs 99, the stock is trading at 10.6x FY2010E consolidated Adj. EPS and 0.4x BV, which is substantially lower than its historical valuation.
Angel Broking has recommended an accumulate rating on Amtek Auto with a price target of Rs 110, in its report dated May 4, 2009.
"At Rs 99, the stock is trading at 10.6x FY2010E consolidated Adj. EPS and 0.4x BV, which is substantially lower than its historical valuation. It must be noted here that the company's business mix would improve FY2010 onwards in line with our estimated revival of the Indian Automotive Industry. However, since the short-term depressed economic (and Earnings) environment would not be adequately be reflected by the P/E multiple, and keeping in mind the company's prospects beyond FY2010, we have valued the company on its Book Value."
"Hence, we recommend an 'Accumulate' on the stock with a target price of Rs 110, which values the company at 0.5x FY2010E BV (adjusted for FCCB interest impact). We maintain a Buy on its other listed group entities, Amtek India and Ahmednagar Forging, with a target price of Rs 48 and Rs 62 (valued on swap ratio declared for their merger), respectively," says Angel Broking's report.
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To read the full report click on the attachment.........
