Amber Enterprises shares rise 2.5% as CLSA reiterates 'outperform', check target price

Amber Enterprises shares rise 2.5% as CLSA reiterates 'outperform', check target price (Pic via Twitter)

Shares of Amber Enterprises rose over 2.5% to Rs 6,805 apiece on December 15 as brokerage CLSA reiterated "outperform" rating on the AC maker.

Company indicated strong medium-term pipeline and growth across consumer durables, electronics and railways in recent analyst meeting, said the brokerage.

CLSA gave a price target of Rs 8,400 for the stock, which indicates up to 23% potential upside. Meanwhile, the BSE Consumer Durables index rose for the third straight day on December by climbing 0.5%.

So far in 2025, stock of Amber Enterprises fell 8%.

Amber Enterprises India's management reiterated guidance, which implies a strong 13–15% outperformance over the consumer durables industry, according to a CNBC report. Demand for consumer durable products has recovered on quarter-on-quarter basis but the room air conditioners industry is still facing inventory issue, according to a Motilal Oswal report. The company is also expected to face higher raw material costs in the near term, according to the brokerage.

"RAC industry is currently impacted by a change in rating norms, which has resulted in higher costs and higher product prices. Industry is also impacted by a steep rise in the copper prices, which can be passed on only after a lag of a quarter," said the brokerage.

"In FY26, Amber expects to 10-15% YoY growth in RAC segment and 35-40% YoY growth in electronics segment. We reduce our margin assumption and cut estimates by 10%/9%/5% for FY26/27/28. Maintain BUY with a revised DCF-based two-year forward TP of Rs 8,000 (Rs 8,400 earlier)," said Motilal Oswal.

Domestic brokerage PL Capital said Amber Enterprises is "positioned for multi-segment growth".

"The RAC industry is likely to stay flattish in FY26, yet the company expects to maintain its 25–28% manufacturing share, aided by rising ODM contributions and growing domestic sourcing by Japanese brands. In Electronics, the acquisition of Shogini strengthens Amber’s PCB capabilities, broadens its customer base, and enhances the overall competitiveness of its PCB vertical, with the combined business this segment is expected to contribute 30–40% over next three years with double digit margin. In Railways, the Rs 2,600 crore order book provides visibility, with FY26 expected to be stable However expects to double the revenue in next two financial years," said Praveen Sahay, Research Analyst, PL Capital.

The brokerage gave a price target of Rs 8,269 for the stock, implying a potential upside of up to 21.5%.

"We cut our earnings estimate by 3.1%/3.5% for FY27/28E and Maintained ‘BUY’ rating and SOTP-based TP of Rs8,269 valuing its Consumer Durables segment at 23x EV/EBITDA FY28E, which implies 20x EV/EBITDA FY28E and 40x FY28E earnings on consolidated basis," said the brokerage.