Broker’s Call: Amber Enterprises (Outperform)

Target: ₹8,510

CMP: ₹6,665.40

Amber reported a solid beat in Q3 on both top-line growth and margins. With the approaching summer (on a high-volume base for the industry last year), we expect revenue growth rate (especially in consumer durables) to taper down. However, we remain structurally positive on its transformative journey into an integrated B2B player with higher TAM, better margins and RoEs, and superior earnings growth potential.

On a segmental basis, consumer durables continued its revenue growth momentum, led by underlying room air-conditioner (RAC) industry channel filling and conversion of a large MNC customer from gas charging to ODM solutions.

The company has strengthened its order book for commercial ACs and onboarded a new customer.

The management in its earnings call raised its FY25 revenue growth guidance along with EBTIDA margin, on the back of a healthy orderbook and new customers in the renewable energy, commercial vehicle and defence for PCBA segment. Amber is currently awaiting the new components PLI scheme to decide on the expansion plan under its Korea JV, depending on the investment threshold target under the scheme.

Electronics division revenue grew, aided by the Ascent Circuits consolidation and a robust c62 per cent growth in the core PCBA business. Expansion plan in Hosur for the Ascent Circuits is on track, and the management expects this to be completed by Q4FY26.  

While Sidwal posted a decline due to delays in product offtake and a sharp margin contraction, the company expects it to rebound from H2FY26 with the guidance on doubling sales in the next three years remains.

Factoring in Q3, we retain O/P and raise our TP to ₹8,510 (at 55x March 2027E P/E).