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HDFC Securities Institutional Equities
Domestic brokerge firm HDFC Securities Institutional Equities has raised its target price on Amber Enterprises India Ltd. to Rs 8,250 from Rs 7,580, while maintaining a ‘Reduce' rating, citing limited upside despite a stronger growth outlook driven by diversification initiatives.
The brokerage highlighted the company's entry into mobile phone manufacturing as a key positive, expected to expand its addressable market, diversify revenue streams, and reduce dependence on its seasonally skewed room air-conditioner (RAC) business.
Amber has entered into an agreement with OPPO India, which manufactures smartphones for brands such as OPPO, OnePlus, and Realme. Production will be undertaken at an existing OPPO facility under a sub-lease arrangement, limiting incremental capital expenditure requirements
Factoring in this development, along with the acquisition of an additional 37.5% stake in Ascent Circuits, the brokerage broadly maintain its FY27E estimates, while increasing our FY28E revenue/APAT estimates by 49/11%, respectively.
Accordingly, HDFC Securities has revised its target price upward to Rs 8,250/share, based on a discounted cash flow valuation (WACC: 12%, terminal growth: 5%), implying ~45x P/E on Mar-28E EPS.
The brokeage maintains its Reduce rating on Amber Enterprises.
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