Ahmednagar Forgings - 168.00

Ahmednagar Forgings Ltd (AFL) was originally promoted by U.V. Patel, an expert in forgings in 1997 but was taken over by Amtek Auto Ltd and made its subsidiary in 2002. Since then, AFL has consolidated its position and diversified into a variety of heavy and medium forgings for all major automotive segments like two-wheelers, passenger cars, LCVs, Medium & Heavy Commercial Vehicles and for other forged parts in locomotives, stationary engines and earth-moving equipment. Currently, it caters to the automotive sector, defence and railways with its large product range which includes forgings, gears, crankshafts, front and rear wheel axles, transmission components, steering parts and high tensile fasteners.

The company has large manufacturing capacities with four state-of-the-art plants equipped with a wide variety of forging equipment such as power presses, connecting rods, upsetters and hydraulic presses etc. The company has also installed and commissioned two more press facilities at the company's plant at Kuruli. The company's manufacturing facilities are QS-9000 and ISO-9002 certified for their quality systems, which are at par with global standards. Under the leadership of the dynamic Amtek group, AFL’s products are well accepted not only in the domestic market but also obtained some very lucrative export supply contracts from USA, Italy, U.K. and Germany. The company is tier-1 vendor and OEM supplier to Telco, Hyundai, Piaggio, Hindustan Motors, M & M, Bajaj Auto, Eicher, LML, Honda Scooters, Kinetic Engineering, General Motors, General Electric (USA), Rockwell International (USA), Fairfield International (USA), Precision Components (UK), Harvin Engineering (UK) and several other major customers in India and abroad.

Due to heavy demand in the auto sector and the increased exports on account of outsourcing by auto MNC, AFL is working at higher capacity utilization and has long term plans to increase its capacity. With every quarter, AFL is improving its topline, bottomline and OPM also. For the six months ending 31st Dec 2004, its net sales grew by 25% to Rs.99 cr. and NP was Rs.10.25 cr. up 63%. OPM improved substantially to 19% compared to 12% last year. It is also expected to return to the dividend list after a gap of 7 yrs. For the full year FY05, it is estimated the company will report a bottomline of Rs.19 cr. on topline of Rs.210 cr. posting an EPS of Rs.24 on its current equity of Rs.8 cr. To fund its expansion plan, the company may make some preferential allotment in future which will trigger the scrip to dizzy heights. Investors are advised to accumulate this scrip at every fall for handsome gain in future.