Buy Amber Enterprises; target of Rs 8400: Motilal Oswal

Motilal Oswal's research report on Amber Enterprises

Amber Enterprises (AMBER) posted a weak performance in 2QFY26. Weakness was driven by the consumer durable segment, which was impacted by lower demand and delayed purchases owing to GST 2.0. The company has still outperformed the RAC industry in 2QFY26, with a decline of 18% YoY vs the industry decline of 30-33% YoY for the quarter. The electronics division was also impacted by weak demand in the consumer durable segment. We expect this demand to revive in 2HFY26, and the company to outperform the RAC industry for FY26. We expect the electronics division’s performance to be driven by growth in both PCBA and PCB segments, along with recent acquisitions of Powerone and Unitronics despite a slight delay in the commissioning of the Ascent facility. This momentum is expected to be further supported by the commissioning of the company’s capacity in JV with Korea Circuit, which we expect to commence from FY28.

Outlook

We expect the railway segment’s performance to remain subdued in the near term. We cut our PAT estimates by 19%/10%/11% each for FY26/27/28 to factor in 2QFY26 performance and also incorporate the recent fund raise of INR10b. Reiterate BUY with a revised TP of INR8,400 (INR9,000 earlier).