Buy Amber Enterprises; target of Rs 5500: Motilal Oswal

Motilal Oswal's research report on Amber Enterprises

We recently interacted with Amber Enterprises (AMBER) management to understand the scope of growth in the consumer durables, railways, and electronics segments. Management highlighted a positive view on the long-term growth of the RAC segment, particularly components expected to be driven by improved AC demand in the coming years and continuous addition of new segments and clients in consumer durables. For the electronics division, the company is adding new customers in segments such as automotive, defense, medical, and telecom and is targeting to grow its electronics division at a fast pace. The company is also continuously expanding the scope of addressable market in railways, though ordering remains slow in this segment. We maintain our positive stance on AMBER on account of its ability to grow other segments beyond RAC.

Outlook

We slightly revise our estimates on slower growth in railways and higher growth in electronics segment and expect revenue/ EBITDA/PAT CAGR of 21%/27%/52% over FY24-FY27. We reiterate BUY with a DCF-based TP of INR5,500, implying 42x P/E on two-year forward EPS (Dec’26).