Hold Amber Enterprises; target of Rs 2300: Emkay Global Financial

Emkay Global Financial's research report on Amber Enterprises

Amber’s 1QFY24 numbers missed our topline estimates but was above our PAT estimates due to strong operating performance. Amber’s strategy of focusing on higher-margin components vs. RACs seems to have driven this beat on EBITDAM. Amber is witnessing increased traction in its mobility division, with a large order win expected to further boost the order book, as it looks to double this business in 2-3 years. While unseasonal rains is expected to cap the industry’s volume growth to 7-8% for FY24, Amber’s dominant market share in the RAC segment and components manufacturing industry (29% from 25% in FY21) is likely to allow it to grow ahead of the market’s pace. We expect this segment to post a 14% CAGR over FY23-26E.

Outlook

We maintain HOLD with a Jun-24 TP of Rs2,300, based on 25x its FY25E one-year fwd. EPS.