Shares of Amber Enterprises India rose by more than 13 percent to reach an intraday high of ₹ 2387.30 apiece on the National Stock Exchange (NSE). At 01:58 PM, its shares were trading at ₹ 2299.95 apiece. 2.079 million shares had changed hands at the counter on Tuesday, against merely 42.829 thousand shares on the previous day.
Amber Enterprises is a leading solution provider for the Air conditioner OEM/ODM Industry in India. In an exchange filing, the company said that its officials will be physically interacting with prospective investors. This includes Meetings via DAM Capital on June 20 and June 21 in Mumbai from 09:00 AM to 05:00 PM and Kotak Conference on June 22, from 09:00 AM to 05:00 PM in Mumbai. The company has already uploaded the presentation which will be shared with these investors during the aforesaid meetings, on the exchanges.
Brokerage firm Jefferies has a buy rating on the stock with a target price of ₹ 3,120 apiece based on a price-to-earnings ratio of 30x, in line with historical averages. This translates to an upside of 35.66 percent as compared to its current share price of ₹ 2,299.95. Moreover, Jefferies projected a sales and profit after tax (PAT) CAGR for the period FY 23-26 at 20 percent and 43 percent respectively.
Jefferies said that Amber’s market share in the production of room air conditioners (RACs) has grown substantially from 22 percent in FY19 to 29-30 percent in FY23, and this number is expected to grow bigger as India’s GDP rises from $ 2,400 to $ 3,000 gradually.
Apart from RACs, the company is also on the path to be a diversified B2B EMS (electronics manufacturing services) player. Its sales mix was RAC at 44 percent, motors at 4 percent, electronics at 16 percent, components at 30 percent and mobility 6 percent, in FY23. In contrast, RAC alone made 71 of the company’s sales in FY18.
“The domestic AC industry is likely poised for multi-year growth. Diversification would mitigate sales seasonality,” the foreign brokerage said.
Amber Enterprises is a small-cap stock with a market capitalization of ₹ 7,100 crores. It has a low return on equity of 8.63% and a high debt-to-equity ratio of 0.76. The company’s shares were trading at a price-to-earnings ratio of 45.19 which is higher than the industry average of 14.69, indicating that the stock might be overvalued as compared to its peers.
Written By Simran Bafna
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