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Industry Overview and Competitive Positioning - Amtek Auto

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        Dipayan Neogi

        24 July 2015

Industry Overview and Competitive Positioning - Amtek Auto

                                        Industry Overview 

Highlights: We want to do a secondary research on Auto Parts Manufacturing industry in India.

  • Engine parts cover 31% of all the parts manufactured.
  • Original Equipment Manufacturers(OEMs) account for volume share of the market, around 15%of the exports.[pic 1]

As per ACMA(Automotive Component Manufacturers Association of India) and DIPP(Department of Industrial Policy and Promotion, Govt of India)the Indian Auto Components Manufacturing Industry is experiencing a healthy sequential y-o-y growth subsequent to the fact that current favourable economic situation worldwide, recovering markets in Asia and US, strong buoyancy in Automobile Sectors all over the world.

According to latest Automotive Mission Plan(2015-16), Auto Manufacturers Industry accounts for almost 7% of Indian GDP and 19 million of direct and indirect employment.

Year

Turnover

Export Projection

2015-16

66

12

2020-21

115

30

                                                                                                   

So we can see that CAGR of turnover is increasing at almost 11.75% in India which is certainly a healthy projection. Also ACMA is pushing for higher export volumes of the all the productions giving rise to more than 20% rise to export revenues. This has been risen from the Auto Policy 2002, Automotive Mission Plan 2016, National Automotive testing and R&D testing projects and conscious effort from Central Government.

Investments: The first FDI in Indian Automobile sector was joint venture between Hero and Maruti Suzuki, India in 1980. After 1993, Indian Government started allowing more than 51% of FDI in automobile sectors. Currently FDI inflows into Indian Automobile Sector is around 12 Billion during 2000 April to April 2015. The different acquisitions and ventures of Indian Auto part manufacturers in the recent years are :

  • Amtek Auto buying Scholz Edelstahl Germany High-quality Hot die forging facility. Scholz

 is worth 175 million euros.

  • Uno Minda formed a JV with Kosei Aluminium Co. to manufacture and sell Alloy wheels in India, a total investment of 200 Cr.
  • German Automobile company BMW will set up local sourcing parts from Indian auto parts manufacturers to promote Make In India initiative.

Government Initiatives : With the help of AMP plans(2016) and initiatives Govt. of India is taking, we can expect that the sectoral contribution to Indian GDP should reach 140 Billion by 2016, the multi-utility vehicles, FDI into auto-parts manufacturing sector is also helping in this regard.        

                                           Amtek-Auto earning and Stock Price Analysis

Date : 24th July, 2015          BSE : 169 INR( Intra-Day avg.)        NSE: 169.25 INR(Intra-day avg.)

                                                        520077                  AMTEKAUTO[pic 2]

Position : Buy.

       

Share Price Movement for last 3 months :[pic 3]

Share Price of last one year :[pic 4]

Market Market Profile of Amtek Auto :

Closing Price

167.70 INR

52 week high-low

129.10 - 268.40 INR

Average Volume

1081437

Diluted Shares Outstanding

22.032 Crores

Market Cap.

3709.05 Crores

Revenue As on FY14( Only Indian Operation)

9802.5 Crores

Dividend Yield

0.3%

Beta

1.56

EV/Revenue

1.81x

EV/EBITDA

6.21x

P/E

7.13

EV

17724.85 Crores

Growth Rates and Valuation Ratios:

Company

Industry

P/E

7.13

27.85

Price to Cash Flow(TTM)

5.54

17.07

EPS(MRQ)

10.22(Normalized)

21.28

EPS(FY14 ending sept 14)

14.72

19.16

EPS(FY13 ending Sept 13)

20.50

       ——

Company

Industry

Operating Margin

16.09

7.40

Net Profit Margin

9.98

6.68

Dividend Yield

0.3

1.31

Profitability Ratio:

...

...

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