Reduce Amber Enterprises India; target of Rs 5625: ICICI Securities

ICICI Securities research report on Amber Enterprises India

Amber’s business transformation journey is progressing well. The company is taking rapid strides under its electronics business – we expect it to compound materially over the medium term. The core RAC business-led consumer durables business showed strong growth and has a huge growth runway in our view. Takeaways: (1) Amber’s major revenue contributors – consumer durables and electronics segment – posted robust revenue growth amid a favourable business environment and we model H2FY25 to remain strong. (2) Gross margins contracted due to change in revenue mix. However, operational efficiencies offset its impact as EBITDA margin expanded YoY. (3) Railway mobility business might continue its weak growth streak in the near term amid business headwinds. While there is strong growth, we believe return ratios are less than cost of capital and FCF generation is also negative.

Outlook

Hence, we maintain REDUCE with a DCF-based revised TP of INR 5,625 (earlier: INR 3,850; implied FY26/27E P/E: 56/42x).

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