Target: ₹5,600
CMP: ₹5,108.60
We met the management of Amber Enterprises (Amber) wherein they reiterated their vision of evolving from being a pure-play RAC player to a comprehensive, backward integrated, and diversified B2B solutions provider to the HVAC and electronics space.
Within Consumer Durables, Amber remains focused on maintaining its RAC value share (25-26%) thereby enabling it to mimic industry growth (mid-high teens) while remaining focused on diversifying into margin accretive components (incl non-RAC) and other products. (Ductable AC, Wearables, etc.).
In the high-growth EMS segment, Amber is expanding its end-user industry within PCBA. Moreover, by acquiring Ascent Circuits and MoU with Korea Circuits, it is looking to tap into the bare PCB opportunity (TAM of ₹32,000 crore, 90 per cent imported).
Notwithstanding near-term weakness in the railway subsystem & mobility segment (project delays – Mumbai metro/Vande Bharat coaches and more non-AC coaches ordered by IR), it remains on track to double its revenue in the next three years, led by increasing wallet share (from 4-20 per cent). We increase our FY25-27 earnings by 3-6 per cent, roll forward to Sep’26 EPS, and assign a 40x multiple to derive a target price (TP) of ₹5,600.
