Amber Enterprises - Robust Growth Outlook Intact: Systematix

Systematix Research Report

Below normal inventory in channel and in company post robust outlook of demand of room AC in FY25 (30-40% industry growth). New BEE norms from January 01, 2026 will further boost sales from Q3 FY26. Fully automatic washing machine will contribute fully from FY27.

Given strong order book, Electronics segment is now likely to grow by 45% YoY in FY25 versus 35% guided earlier, with ~8% Ebitda margin; printed circuit board will be a big growth driver going forward. Railway Subsystems faced slow lifting of materials by Indian Railways and Metro; strong order book (Rs 20.75 billion) and new product additions provide long-term growth visibility.

Overall, Amber aims 25% YoY revenue growth in FY25, driven by consumer durables and Electronics EMS segments. We expect 27%/32%/74% CAGR in revenue/Ebitda/PAT over FY24-26E (FY19-24: 20%/18%/7%) with ~16% return on capital employed in FY26E.

Product portfolio expansion for new applications, backward integration and superior mix will drive revenue, margin and RoCE (19-21% RoCE by FY28, as per management; key to sustain valuation re-rating).

We maintain Hold rating with an unchanged target price of Rs 4,773 (40 times FY26E P/E).

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