The HVAC (Heating, Ventilation, and Air Conditioning) and RAC (Room Air Conditioning) sectors in India are experiencing robust growth, driven by rising temperatures, urbanization, and the increasing demand for comfortable living and working conditions. Key in these sectors include Voltas, Blue Star, Godrej Appliances, LG Electronics, and Daikin, all of which are leaders in providing innovative cooling solutions for residential, commercial, and industrial applications.
The growth potential remains strong due to the expanding middle class, growing construction activity, and the increasing need for energy-efficient solutions. Opportunities lie in the demand for eco-friendly and energy-efficient products, while challenges include high energy consumption, fluctuating raw material costs, and regulatory pressures on environmental sustainability.
Share Price
The shares of Amber Enterprises Limited are currently trading at Rs. 6,900 up by 9.83% from its previous close of Rs. 6,283 as of January 23, 2025. The stock also touched an intraday high of Rs. 7,029.
Reason for the Surge in Price
Amber’s Return to Profitability
Amber is expected to return to profitability in the ongoing quarter, as per estimates from analysts, with a projected net profit of ₹23 crore, a significant turnaround from the ₹50 lakh loss it reported during the same period last year. This recovery will imply the company’s improved performance and strategic initiatives which would have helped the company turn profitable. The positive outlook highlights Amber’s ability to recover from previous challenges and grow in a competitive market.
Strong Topline Growth
Amber’s topline is likely to grow by an impressive 33% to ₹1,722 crore, driven by strong demand across its business segments. The growth is mainly attributed to the strong performance in its Electronics Manufacturing Services (EMS) business, which continues to lead the topline growth.
The company’s diversified portfolio and improved market positioning have helped it capitalize on opportunities, particularly in the growing electronics and railways sectors. This growth reflects Amber’s successful expansion strategy and ability to meet increasing demand.
Robust EBITDA Performance
Amber’s EBITDA is expected to see a remarkable 53% jump, reaching ₹120 crore for the quarter. This is driven by a combination of factors, including the Ascent acquisition, a better product mix, and a stable raw material basket.
Additionally, EBITDA margins are expected to improve by 90 basis points year-on-year, reaching 6.9%. This margin expansion if met will be a clear sign of the company’s effective cost management and operational efficiencies, helping it deliver better profitability despite rising input costs.
Positive Outlook for the RAC Business
The festive season, coupled with the upcoming summer, has fueled optimism around Amber’s Room Air Conditioning (RAC) business. The company’s RAC segment is expected to perform well, contributing significantly to overall growth.
Amber’s focus on new client acquisition, along with its strong product offerings in electronics and railways, positions it well for continued success. Key areas to watch include the standalone and subsidiary business outlook, demand trends, and margin expansion across non-RAC segments.
The Q3 results of the company are expected to be declared on Friday, 24th January 2025 at 9:30 a.m.
Written By: Dipangshu Kundu
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
