Amtek Auto surges over 19 percent; Nomura starts with 'buy' rating

Reuters Market Eye - Amtek Auto surges as much as 19.3 percent to a six-year high of 264.90 rupees after Nomura initiates coverage on the stock with a "buy" rating and a target price of 416 rupees, citing it as a leveraged play on a turnaround in the domestic automotive industry.

Amtek has been very aggressive with capex and acquisitions in the past which has not paid as a slowdown in the key markets of India and Europe led to a build-up of significant debt, the investment bank says in a report on Friday.

Nomura adds it believes the company's management is now focused on improving return ratios and generating free cash flows, which should be taken positively by the market.

 

(Reporting by Abhishek Vishnoi)