Amber Enterprises Q1 Results Review - A Mixed Bag; Healthy Growth, Margin Outlook: Systematix

Systematix Research Report

Amber Enterprises India Pvt. Ltd.’s Q1 FY24 result was a mixed bag (revenue down 7% YoY, Ebitda/profit up 33%/9% on strong 7.8% margin).

Component strategy, which led to a change in the product mix, helped improve margins, despite weak room AC demand arising from unseasonal weather patterns.

Post strong recovery in FY23 (revenue/Ebitda/profit after tax up 65%/52%/47% YoY), management has guided 15-20%, 35-40% and 20-25% growth, respectively, in its mobility, electronics and motor divisions for FY24.

The room AC and components division is expected to outpace industry growth (upped guidance to 7-8% from flattish earlier).

We retain our estimates post Q1 result and expect Amber Enterprises to record 17%/27%/41% compound annual growth rate in revenue/Ebitda/profit after tax over FY23-25E (FY20-23: 20%/11%/flat), with 105 bps expansion in its Ebitda margin to ~7%.

Return on invested capital too is expected to expand ~400 bps to 16.4% in FY25E. With maintain our 'Buy' rating and target price of Rs 2,590 for Amber Enterprises, based on 28 times FY25E earnings per share of ~Rs 93.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.