The shares of this leading room air conditioner manufacturer rose nearly 5.8 percent to ₹3,605 per share after CLSA gave a buy call on the stock with an upside of 22 percent.
On Friday, Amber Enterprises India Ltd. shares were trading at ₹3,544, up 4.05 percent from the previous close on the National Stock Exchange. The company has a market capitalization of ₹11,942 crore.
The company specializes in manufacturing durable consumer products, including room air conditioners (RAC), RAC & non-RAC components, and HVAC solutions for mobility applications.
Amber Enterprises, a leading player in the Indian Room Air Conditioner (RAC) original equipment manufacturer (OEM) sector, has achieved significant success, commanding over 70% market share in the RAC OEM industry and capturing 26.5% of the overall RAC market in FY2023.
The company’s annual revenue saw a slight decrease of 4 percent, moving from ₹1,348 crores in Q3 FY23 to ₹1,294 crores in Q3 FY24. Moreover, the net profit shifted from a gain of ₹15 crores to a loss of ₹0.51 crore over the same period.
Amber Enterprises India Ltd. shares have gained 19 percent in the last six months and 86 percent in the last 12 months.
The company’s management is optimistic about achieving a total addressable market size of ₹ 75,000-80,000 crore within the next 5-6 years in this particular segment. Anticipating exponential growth, the company aims to capture 20% of the total addressable market size over the next 4-5 years, as indicated in the Sharekhan brokerage report.
CLSA recommended a buy call on Amber Enterprises India Ltd for a target price of ₹4,300, indicating an upside of 22 percent as compared to the current price levels of ₹3,523.55 per share.
Analysts at CLSA stated that, despite a 14 percent decline in Amber Enterprise stock over the past month, the recent correction presents an appealing opportunity for entry. They believe that the decline, possibly influenced by market softness, has
been excessive. The analysts emphasised that the medium-term outlook, particularly regarding robust growth in the non-RAC (refrigeration and air conditioning) segment, remains unchanged.
The brokerage indicated that even in the scenario where RAC’s market share decreases by 19 percent or 10 percent by FY30/40, the company’s other segments are poised to account for 50 percent of the revenue over the next five years.
Additionally, brokerage firm Sharekhan has given a “buy” call on Amber Enterprises, with a target price of ₹4,100 a share, saying that the company is well placed to capture rising demand for component ecosystem development.
Written by Omkar Chitnis
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