Amber Enterprises India Ltd. share price target

Positioning from a RAC manufacturer to a diversified EMS player: Amber's business mix is highly dominated by consumer durables division (~73% of revenue), which largely comprises of RAC segment and is thus cyclical in nature. The company is steadily diversifying into i) components business across RAC and nonRAC segments i.e. washing machine, refrigerators, ovens, water purifiers, etc. Completely built unit (CBU) proportion in revenue mix has reduced from 72% in FY18 to 43% in FY25. ii) electronics i.e. (~22% of revenue) is slated to grow at a brisk pace with large investments planned. Client base is diversified across consumer durable companies, automobile, IT & telecom, Industrial, Defence and Aerospace....

Strong beat on all fronts, with broad-based growth. Sharper RAC growth vs brands indicate continued shift to outsourcing though high channel inventory (~2.2m-2.5m vs. 1m-1.2m norm) could dampen near-term momentum.

Q1FY26 revenues rose 44% led by robust growth across segments. The consumer durables segment did well, growing 33%, amid the RAC industry tailwinds on the back of strong demand from the commercial AC segment.

Amber Enterprises (AMBER) posted better-than-expected performance in 1QFY26. Revenue outperformance was driven by continued strong growth in consumer durables—particularly in RAC, despite weak demand faced by RAC players in 1QFY26— as well as sustained growth in the electronics division.

Q4FY25 revenues rose 34% led by robust growth across segments. Consumer durables segment did well, growing 27%, on strong demand for RAC and non-RAC products.

Over the past 3-4 years, Amber has diversified business from standalone RAC segment to electronics and railway segments which is now reaping fruits for the company. Each segment will contribute meaningfully to revenues and bottomline in 2-3 years. Q3FY25 revenues rose 65% led by robust growth across segments

Amber Enterprises (Amber) reported better-than-expected revenue and EBITDA in 3QFY25; however, PAT came in line with our estimate due to losses from subsidiaries. Revenue/EBITDA improved 65%/102% YoY, led by the consumer durables and electronics segments, while railways continued to decline.

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.

Q2 achieved 82% YoY topline growth with 30bps EBITDAM expansion, although gains were tempered by the shift in product mix

Q2 numbers were strong with a profit of Rs. 21 crore (versus a loss in the same quarter last year), superseding our estimates of Rs. 9 crore. Revenues rose 82% y-o-y (above our estimates of 37%) led by Consumer Durables (94% growth y-o-y) and Electronics (95% y-o-y) segments.

Amber Enterprises (Amber) reported better-than-expected results driven by strong
performance of the consumer durables and electronics segments. The company’s
revenue/EBITDA jumped 82%/91% YoY for 2QFY25.

Healthy growth in its consumer durables and electronics drove Amber’s strong Q2 growth. With its expanded portfolio and client added, it expects to outdo industry growth in RAC.

We recently interacted with Amber Enterprises (AMBER) management to understand the scope of growth in the consumer durables, railways, and electronics segments.

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.

Q1 numbers were strong with a profit of Rs. 75 crore (up 60% y-o-y) that was in line with our
estimates. Revenues grew by 41% y-o-y.

Amber’s revenue/EBITDA/PAT grew 41.1%48.7%/58.6% YoY, respectively. Gross/EBITDA margin expanded 30bps/42bps lower input prices, in our view.

Q1 numbers were strong with a profit of Rs. 75 crore (up 60% y-o-y) that was in line with our
estimates. Revenues grew by 41% y-o-y (Beats our estimates by 10%) led by RAC segment (+51%)
driven by favourable peak summer demand.

We maintain our HOLD rating on the stock.

Subdued Q4 topline with EBITDA margin expansion of 110bps on better product mix