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SHARETIPSINFO >>Research Reports >> AMD Industries Ltd (25-12-2009)
LISTING |
|
|
Rs 25 |
|
Rs 34/ Rs8.4 |
|
Rs10 |
PE RATIO |
2.83 |
AVERAGE VOLUME |
5281 |
MARKETCAP |
Rs 48 crore |
P/BV |
0.46 |
COMPANY OVERVIEW:
AMD Group was founded in the year 1958 is one of the leading company in the field of packaging solution. Company caters to the need of wide range of client from small players to multinational.
AMD is the largest manufacturer of crown caps in India. Crown cap division has manufacturing base in Ghaziabad and Neemrana (Rajasthan).
Seeing a great opportunity in textile, group is setting up integrated textile park with spinning, processing, weaving and yarn dyeing infrastructure. The project is expected to cost Rs 300 crore to the company.
Looking for diversification, company also sensed a Real Estate as viable investment option. So AMD also forayed into Real Estate and created land bank in Gurgaon and other places. Under Real Estate Business Company will develop township and malls.
Prominent client of AMD includes:
Pepsi India
Coca Cola
HUL
Foster India
United Breweries
SAB Millers
PRODUCT MIX:
Product Name |
Sales(In crore) |
% of Total |
PET Preforms |
Rs 29.59 |
35.09% |
Crowns |
Rs 25.55 |
30.30% |
CSD Closure |
Rs 17.30 |
20.52% |
Job Work |
Rs 9.22 |
10.94% |
Iron & Steel (Items) |
Rs 1.52 |
1.80% |
Waste/Scrap |
Rs 1.02 |
1.21% |
Pet &CSD Closures |
Rs 0.11 |
0.12% |
INVESTMENT RATIONAL:
Company showed a positive turnaround during the Q2FY10 as compared to Q2F09. PAT moved up by 1616%.
PBDITA margin has also shown remarkable surge of 5.5% to 21.1% in FY09.
Company has diversified into Real Estate business through its subsidiary. Company has also developed land bank in Gurgaon and other places.
Company is also diversifying into textile business and is trying to leverage India`s competitiveness cotton textiles.
AMD is leading manufacturer of crown caps in India.
Company is having good client base.
SHAREHOLDING PATTERN:
|
|
NO. OF SHARES |
% TOTAL |
PROMOTERS |
11083417 |
|
57.82% |
INSTITUTION |
2226229 |
|
11.62% |
GENERAL PUBLIC |
5857103 |
|
30.56% |
GRAND TOTAL |
19166749 |
|
100% |
FINANCIAL:
|
|
31/03/06 |
31/03/07 |
31/03/08 |
31/03/09 |
TOTAL INCOME |
71.02 |
70.89 |
84.95 |
93.41 |
EXPENDITURE |
-58.41 |
-59.62 |
-71.71 |
-73.69 |
PBDITA |
|
12.61 |
11.27 |
13.24 |
19.72 |
DEPRECIATION |
-3.18 |
-2.84 |
-3.77 |
-4.79 |
PBIT |
|
9.43 |
8.43 |
9.47 |
14.93 |
INTEREST |
|
-4.29 |
-5.12 |
-5.08 |
-7.97 |
PBT |
|
5.14 |
3.31 |
4.39 |
6.96 |
TAX |
|
-1.07 |
-1 |
-1.27 |
-1.78 |
PAT |
|
4.07 |
2.31 |
3.12 |
5.18 |
Key Highlights:
CAGR IN TOTAL INCOME IS 9.56%
CAGR IN PBDITA IS 16%
CAGR IN PAT IS 8.37%
RATIOS:
|
31/03/06 |
31/03/07 |
31/03/08 |
31/03/09 |
EPS |
2.06599 |
1.172589 |
1.583756 |
2.629442 |
PBDITA MARGIN |
17.75556 |
15.89787 |
15.58564 |
21.11123 |
NPM |
5.73078 |
3.25857 |
3.672749 |
5.545445 |
INTEREST COVER |
2.198135 |
1.646484 |
1.864173 |
1.873275 |
Key Highlights:
EPS moved up from Rs 2.06 to Rs 2.62 in 3 year period.
PBDITA margin showed remarkable recovery in FY09 due to reduction in the price of raw material and operational efficiency. The margin jumped 5.6%.
NPM also showed a good recover in FY09. It moved up by 2%.
Interest cover remained almost flat at near 2.
COMPARISION OF Q2FY2010 WITH Q2FY2009:
|
|
Q2FY09 |
%CHANGE |
Q2FY10 |
TOTAL INCOME |
13.08 |
65.60% |
|
21.67 |
EXPENDITURE |
-10.38 |
|
|
-17.17 |
PBDITA |
|
2.7 |
66.60% |
|
4.5 |
DEPRECIATION |
-0.97 |
|
|
-1.17 |
PBIT |
|
1.73 |
|
|
3.33 |
INTEREST |
|
-1.47 |
|
|
-1.92 |
PBT |
|
0.26 |
|
|
1.41 |
TAX |
|
-0.32 |
|
|
-0.5 |
PAT |
|
-0.06 |
1616% |
|
0.91 |
Key Highlights:
Total Income jumped 65%.
PBDITA surged by 66%
Company showed a turnaround in the quarter as compared to previous year. PAT moved up by 1616%.
VALUATION &OUTLOOK:
At CMP Rs 25company stock is trading at 9.25X to FY10 earning. Going forward we expect company EPS to increase by 50% to Rs 3.9 per share due to the business coming in from textile and Real Estate business. So if we look at FY11 it is trading at 6.4X. If we value the company at 9X to FY11 EPS the fair value comes at Rs 35.
The outlook of the company remains stable. Improvement in the business environment and picking up of real estate market and textile export market will bring additional revenue to the company. Company’s bread and butter business to remain stable and we do not expect any big change in the top line and bottom line from this segment.
CONCLUSION:
Stock is good for investment with time horizon of 6-8 months time frame. The risk reward ratio is favorable and downside is limited on the stock.
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