Buy Amber Enterprises; target of Rs 7350: Motilal Oswal

Motilal Oswal's research report on Amber Enterprises

Amber Enterprises (Amber) reported better-than-expected results driven by strong performance of the consumer durables and electronics segments. The company’s revenue/EBITDA jumped 82%/91% YoY for 2QFY25. Strong growth in the overall AC industry, addition of new clients, and strategic focus to grow the electronics segment aided performance during the quarter. We expect Amber to benefit from faster growth in the electronics segment driven by new client additions, JV with Korea Circuit, as well as its capacity expansion across Ascent Circuit. We raise our earnings estimates by 14%/19%/22% for FY25/FY26/FY27. We also increase our TP to INR7,350 due to earning revision as well as higher valuations led by faster growth expected in electronics and the possibility of this division widening focus towards a bigger EMS market. Reiterate BUY.

Outlook

The stock currently trades at 56.7x/37.2x P/E on FY26/27E earnings. We raise our estimates and reiterate our BUY rating on the stock with a DCF-based TP of INR7,350, implying 46x P/E on a two-year forward EPS (Dec’26).