Goldman Sachs has hiked the target price for Amber Enterprises Ltd., highlighting the company's entry and expansion into the Printed Circuit Board (PCB) manufacturing sector as a transformative growth lever.
In a latest note, Goldman Sachs has maintained a 'Neutral' rating on the stock while hiking the 12-month target price from Rs 6,950 to Rs 7,330.
The brokerage firm expects PCB manufacturing to contribute as much as 12% to Amber Enterprises' consolidated revenue as well as a staggering 26% Ebitda margin by FY30.
This could help the company diversify its reliance on seasonal air conditioner sales.
In FY25, Amber Enterprises' electronic solutions segments, which include PCBs, printing wire assemblies and EMS products, contributed 24% to total revenues, according to the latest filings.
In recent years, Amber Enterprises has shored up its PCB manufacturing capabilities, notably acquiring Ascent Circuits – a single- and multi-layer PCB manufacturer – in FY24. In FY25, the company went into a joint venture with Korea Circuits, targeting production of high-density interconnect (HDI), flexible PCBs, and semiconductor substrates.
Government policy support and anti-dumping duties, along with the Electronics Components Manufacturing Scheme (ECMS), are expected to drive domestic demand, thus helping Amber Enterprises increase its share in the bare PCB market from 2% to 4.6% by FY30, Goldman Sachs noted.
It must be noted that 80-90% of India's PCB demand is met through imports currently, meaning Amber will have a significant opportunity to become an import substitute.
However, Goldman Sachs adds that the PCB market in India remains saturated and export opportunities remain limited. Margins in rigid and flexible PCBs have also been volatile.
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