Buy Amber Enterprises India; target of Rs 5010: Sharekhan

Sharekhan's research report on Amber Enterprises India

Q1 numbers were strong with a profit of Rs. 75 crore (up 60% y-o-y) that was in line with our estimates. Revenues grew by 41% y-o-y (Beats our estimates by 10%) led by RAC segment (+51%) driven by favourable peak summer demand. Operating profits rose by 49% y-o-y. Consolidated EBITDA grew by 49% to Rs 196 crore that drove margins to 8.2% (in line with our estimates). A 44% growth in consumer durables space was driven by RAC segment (up 51%) and Non-RAC segment (39%). JVs for washing machines is strengthening the Amber’s position in consumer durable Segment. Electronics segment grew by 45% led by Ascent’s consolidation. (ex-Ascent, growth is 18% y-o-y). Company has bagged new orders from aerospace and defence sectors.

Outlook

We maintain a Buy with a revised PT of Rs. 5010 (based on 40x of FY2026E EPS), as we expect profitability to improve, backed by a better RAC product profile, traction in the motors, electronics and mobility division as well as growth in exports. At CMP, the stock trades at a valuation of 52x/35x its FY2025E/FY2026E EPS.