Hold Amber Enterprises India; target of Rs 1619: Emkay Global Financial

Emkay Global Financial's report on Amber Enterprises India

Amber reported a weak performance, owing to the loss of RAC sales during summer months and high channel inventory. EBITDA was impacted by weak product mix and detention charges paid to shipping companies. RAC volumes were down 81%, within that higher proportion came from ODUs. In components segment, Sidwal’s performance was relatively resilient with a 30% yoy fall. The order book in Sidwal stood at Rs5.5bn with fresh order wins of Rs1.15bn in Q1. Management is optimistic about a potential policy announcement under the ‘Atmanirbhar’ program, which will promote the component ecosystem, import substitution and eventually create export opportunities.

Outlook
Our revenue assumptions are largely unchanged, while we cut FY21E EBITDA by 8% (uncaged for FY22/23E) on higher costs in Q1. We maintain Hold with a revised TP of Rs1,619 (25x PE on Sept’22E).

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