Amtek Auto, the flagship company of the Amtek group, was incorporated in 1985. Amtek Auto Ltd has drawn its future growth strategy, through acquisition of existing units in the same line of business, since setting up a new unit involves huge expenditure and a long gestation period. As a step in this direction Amtek identified Indsil Auto Components Ltd (IACL) an unlisted company in the field of manufacturing of auto components and took a 90 per cent stake in the company in April 2002. Amtek Auto Limited has purchased 11,83,790 fully paid up equity shares representing 14.80 per cent of the voting rights of The Ahmednagar Forgings Limited (AFL) on spot delivery basis from the existing promoters, their friends, relatives and associates at a price of Rs. 34.50 per share payable in cash, on 10th October, 2002. ChrysCapital, a private equity (PE) fund has acquired around 7% equity stake in Amtek Auto for Rs 2.29 billion through open market purchases in July 2008. ChrysCapital has acquired more than 9.3 million shares through six bulk deals transacted at different prices on the BSE and NSE. Recently, Amtek Auto (Amtek) & Sumitomo Metal Industries (Sumitomo Metals) of Japan have signed a joint venture (JV) agreement for production and sale of forged crank shafts for automotive applications in India. This JV is to be formed with investment of 50% by Amtek, 40% by Sumitomo Metals, and 10% by Sumitommo Corporation. Sumitomo Corporation is the global partner of crankshaft business of Sumitomo Metals. This is in line with Amtek’s strategy of augmenting its product portfolio. Amtek will contribute to this JV, its existing local market and manufacturing know-how and experience. Sumitomo Metals, on the other hand will bring in its world-class crankshaft forging technology.

Products & services—

The Group is today the largest manufacturer of connecting rod assemblies and gear shifter forks & yokes in India. Its customer list includes the entire major automobile manufacturing companies of India. Amtek`s other products include flywheel ring gears, flex plates press forgings, case components, bearings and other precision automotive components.

Amtek Auto has a number of collaborations - a technical one with Aizen Company Limited, Japan for manufacturing connecting rods, a technical one with Ateliers Siccardi, France for manufacturing upto six - throw crank shafts and, a joint venture with Benda Kogyo Co of Japan for manufacturing flywheel ring gears and flex plates. We expect company to consolidate its market position in the domestic market aided by a strong volume growth coming in from both the passenger car and utility vehicle segments also aided by a healthy increase in exports.

Valuation—
We are positive on the company's capital expenditure, and product acquisition plans. At current market price, stock is trading at 5.78 P/E multiple of its FY2010 estimated earnings. We recommend investors buy on “Amtek Auto” with a medium to long-term investment horizon.