Nomura starts covering Amtek Auto with 'buy' rating

Nomura has initiated coverage of Amtek Auto with a "buy" rating and a target price of Rs 416, citing it as a leveraged play on a turnaround in the domestic automotive industry.

Cheering the news, shares of the company surged as much as 19.3 per cent to a six-year high of Rs 264.90 in early trade.

"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 said in its report on Friday.

Nomura added 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.

(Reuters)