Amber Enterprises Sees Strong Growth in Electronics, Despite Challenges in RAC Segment

Amber Enterprises Outlook: Improving Demand and Growth Prospects

After meeting with Amber Enterprises management, we have gained insights into the company's performance and future growth prospects. The consumer durable demand has shown sequential improvement, although there is still channel inventory in the system for Room Air Conditioners (RAC).

Key Takeaways

• The electronic division is expected to outperform other segments, driven by new client additions and acquisitions.
• The railway segment is likely to see only gradual improvement this year.
• The RAC industry is currently facing challenges due to changes in rating norms, resulting in higher costs and product prices, as well as a steep rise in copper prices.

Despite these challenges, Amber Enterprises expects to achieve 10-15% YoY growth in the RAC segment and 35-40% YoY growth in the electronics segment in FY26. We have reduced our margin assumption and cut estimates by 10%/9%/5% for FY26/27/28.

Investment Outlook

We maintain a BUY recommendation with a revised DCF-based two-year forward target price of INR8,000. It is essential to note that investment decisions should be made after consulting certified experts, as the views expressed are those of the investment experts and not of the website or its management.

Please consult with certified experts before making any investment decisions.