Amtek Auto Rebounds 12% After Falling Over 50% in Two Days

Shares of Amtek Auto rose as much 12 per cent on Friday at its day's high of Rs 71.75 after the auto ancillary company said that it is exploring "various means of fund raising".

Amtek Auto shares had crashed over 50 per cent in the past two sessions amid worries over the company's high level of debt and operational performance and its exclusion from the derivative segment at October series-end.

Analysts say exclusion from the derivatives segment will hit trading volumes in Amtek Auto and will restrict arbitrage opportunities.

In a clarification to the stock exchanges, Amtek Auto said, "There is temporary cash flow mismatch in the company and to mitigate the present situation, the promoters have already infused Rs 750 million and if required in future will also infuse more funds."

"In the quarterly results of the company for the quarter ended 30th June, 2015, there is decline in the operational performance of the company due to current market scenario which caused decline in the sales and profit margins of the company," it added.

In the June quarter, Amtek Auto posted a net loss of Rs 157.6 crore as compared to net profit of Rs 86 crore in the corresponding quarter because interest costs more than doubled to Rs 237 crore against Rs 115 crore year-on-year.

Amtek Auto is reeling under high debt, which impacted the auto component maker's first quarter performance, analysts say. Amtek Auto's debt to equity ratio of about 1.5 times is among the highest for auto component makers across emerging economies in Asia Pacific, according to StarMine data.

In the clarification to the exchanges, Amtek Auto also said its "management remains confident in the company's abilities to capitalize on opportunities arising out of a stronger recovery in the Indian automobile industry over the quarters to come. The management re-iterates that the long term fundamentals of the company remain strong."

Amtek Auto shares ended 1.26 per cent higher at Rs 64.35 as compared to a 0.87 per cent slump in the Nifty.