Sharekhan's research report on Amber Enterprises India
Amber is capitalising on strong growth in the AC industry backed by a strong summer and soaring temperature. AC penetration is expected to improve significantly, and volumes are likely to clock a 30% CAGR going forward. Second leg of growth will be fuelled by Electronics vertical expansion wherein government has levied anti-dumping duty on PCBs. Company’s transition from ACs to electronics to mobility has driven up margins and is further expected to improve asset turn leading to better return ratios. Company has guided to reach 19% RoCE in the long run.
Outlook
We maintain a Buy rating, rolling forward valuation on FY27E with a revised PT of Rs. 5500 (based on 38x of FY2027E EPS), on hopes of better profitability, 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 67x/43x/33x its FY2025E/FY2026E/FY2027E EPS.
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