Amber’s strategic expansion of its PCBA manufacturing from RAC-PCBA manufacturer in FY18 to comprehensive EMS service provider now seems justified due to strong growth prospects of EMS sector (30-40% growth YoY). Additionally, business tailwinds like imposing of anti-dumping duty on PCBs may further boost growth prospects. Amber’s guidance of 45%-plus revenue growth (from earlier 35%) and 7-7.5% margin in FY25 seems achievable led by (1) strong orderbook and (2) order wins in margin-accretive defence segment.
OutlookAmber’s transition from mere RAC contract manufacturer to comprehensive EMS solution provider is playing out well. With the stock price surging 80% in the last 12 months, we revise our rating to REDUCE from HOLD with DCFbased revised TP of INR 3,850 (implied FY26E P/E: 46x).
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