Amber Enterprises Q3 Results Review - Shifting Gears To Electronics And Mobility: Dolat Capital

Dolat Capital Report

Amber Enterprises India Pvt Ltd.'s Q3 FY24 results were below our estimates. While mobility division grew 11%, consumer durable and electronics fell 5/8% respectively. Room AC brands shifting to in-house manufacturing impacted CD performance.

The new Joint venture with Titagarh will help address ~25% of bill of materials per Vande Bharat coach (Rs 20-25 million) and increase the order visibility of the mobility segment to Rs 20 billion. Further, segment margins are strong at ~20-22%.

Partnership with ascent circuits and onboarding of new customers in smart metering/automotive will enable Amber to double revenue of electronics division over next two years with Ebitda margin of 7-7.5% (5% currently).

Next two-three quarters are expected to be challenging due to Amber’s transformational shift. Diversification to non-RAC business on the back of new initiatives is likely to boost performance FY26E onwards.

We have downward revised our FY24/25/26E earning per share to Rs 42/75/107 respectively. to factor in weak Q3 performance. We downgrade the stock to reduce with a revised target price of Rs 3,660, valuing at 34 times FY26E EPS (25% discount to last 5 year average).

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