Amber Enterprises Banks On Electronics Division Growth To Log Margins Of Up To 9.5% By FY29

Electronics Manufacturing Services company Amber Enterprises expects its electronics division to achieve double-digit margins by fiscal year 2028, paving the way for a consolidated margin of 9% to 9.5% by fiscal 2029, according to Chief Executive Officer Jasbir Singh.

“I think consolidated numbers will go up once the electronics division starts moving towards the double-digits. We expect our electronics division to touch double-digit numbers as soon as we implement capex for this incentive (PLI) scheme," he said, during a conversation with NDTV Profit.

The Union Cabinet recently approved the production-linked incentive scheme for passive or non-semiconductor electronics components, with an outlay of Rs 22,919 crore. Passive components in electronics do not generate power but store, dissipate, and/or release it. The scheme is expected to attract a total investment of around Rs 59,350 crore, with Amber Enterprises expected to be among the key beneficiaries.

“This is a five-year scheme, so there will be a threshold announced in the guidelines. We are awaiting those guidelines. We are planning to invest about Rs 3,000 crore throughout the scheme. That will be the overall revenue increase we anticipate as we move ahead,” Singh said.

He called the scheme well-timed, highlighting Amber Enterprises' readiness to capitalise on it following the acquisition of Ascent Circuits in January 2024. This acquisition strengthens the company’s printed circuit board division, the top executive mentioned. Additionally, Amber Enterprises has a joint venture with South Korea’s Korea Circuit to boost the manufacturing of HDI (High-Density Interconnect), flex, and semiconductor substrate PCBs.

Singh credited the company’s electronics division growth to its acquisition of ILJIN Electronics in 2018. “We started the electronics division in 2018 by acquiring ILJIN Electronics. It was a small Rs 300-crore company with 2.8% Ebitda. Now, we have already reached almost 7.5% to 8% in our electronics division, and that's growing by about 45% to 50%,” he said.

He also underscored the success of the PLI scheme for AC components. “We were aiming for value addition, and it has already been a very successful scheme. From 25% value addition in 2021, we have already reached 65% as an industry. Compressor plants have been set up, copper plants have been established, and it is moving towards 80% in the next two years,” he said.

Addressing concerns about the imposition of tariffs by US President Donald Trump, Singh stated that Amber Enterprises would not be affected. “For our group there is no impact because we don't export large numbers to US markets. But yes, we were looking for exporting in future,” he said. 

Shares of Amber Enterprises closed Wednesday's session 1.49% higher at Rs 6,982 apiece on the NSE, while the benchmark Nifty 50 advanced by 0.72%.