Amber Enterprises - Electronics, Mobility Are The Future Growth Levers: Nirmal Bang

Nirmal Bang Report

We hosted the management of Amber Enterprises India Pvt. Ltd. for our conference. His commentary was quite bullish on the room AC space, with expectations of RAC industry doubling in size in the next four years.  Currently, the RAC inventory in the channel is normal. In FY25, the management expects the RAC industry to grow by ~30%. Within consumer durables, RAC and RAC Components contribute ~70% to the topline.

Currently, the split of RAC:RAC Components is at ~50:50. Amber is currently capable of catering to ~70% of the BOM cost in RAC.

Electronics is expected to grow by ~45% in FY25, with Ebitda margin at ~7.5- 8%. However, most of this will be volume driven due to ASP compression in hearables and wearables by ~40%.

The order book for SIDWAL stands at ~Rs 21 billion, with order execution expected over the next three years. The management expects revenue to double in the next three years.

We maintain Accumulate with a target price of Rs 4,300. This implies a PE of 40 times on June’26E EPS - ~35% discount to the five-year historical average PE on 1-year forward basis. While contribution from high-margin businesses (RAC and non-RAC components), expansion of product portfolio under PCBA & PCB and diversification into various electronic applications under mobility are all positives, scaling up of revenue share and making meaningful contribution to overall margins is still a couple of years away.

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