Amtek Auto shares wiped off early losses in the afternoon trade on Friday and closed 3.80 per cent higher at Rs 32.75 on BSE. The scrip slid as much as 18.8 per cent in the early trade.
The share price of Amtek Auto declined 35 per cent to Rs 31.55 on Thursday and hit its lowest intraday level since February 2001.
Amtek Auto on Thursday declined after foreign institutional investors sold nearly four million equity shares of the company through open market. The Swiss Finance Corporation (Mauritius) has sold 2.74 million shares at Rs 35.88 per share, while Barclays Capital Mauritius has sold 1.22 million shares at Rs 36.50 per share on the NSE.
The scrip declined 81.54 per cent in the past one month till September 3. Amtek Auto had registered four daily falls of over 25 per cent in the past month.
“Fundamentals of Amtek Auto are weak. One of the reasons behind the fall could be the company is not generating sufficient cash flows to meet their interest expenses,” said, Ajay Jaiswal, head of research at Kolkata-based Microsec Capital.
For the quarter ended June 2015, the company posted net loss of Rs 157.60 crore against net profit of Rs 86.08 crore in the corresponding quarter a year ago. Operating profit of the company declined 47.98 per cent year-on-year to Rs 173.83 crore.
In a BSE filing on August 20, the company said, “As disclosed 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. There is temporary cash flow mismatch in the company and to mitigate the present situation, the promoters have already infused Rs 75 crore and if required in future will also infuse more funds. The Company is also exploring various means of fund raising.”
The National Stock Exchange (NSE) has decided on Tuesday to remove Amtek stock from F&O segment with effect from October 30, 2015.
Stocks of Amtek Auto in pressure on continued worries over reports of liquidity issues at the company. Amtek Auto’s debt-to-equity ratio of about 1.5x is among the highest for auto component makers across emerging economies in Asia Pacific, according to StarMine.
Group company Castex Technologies has been hitting daily lower limit in each session since July 13. The share price of Castex Technologies declined 4.91 per cent at Rs 49.40 on Friday.
During July 10 and September 3, the share price of Castex Technologies declined around 85 per cent to Rs 51.95. It was at Rs 344.80 on July 10, 2015.
(With inputs from Reuters)