The shares of this leading room air conditioner manufacturer rose nearly 4.5 percent to ₹3,373.30 per share after its arm incorporated a wholly-owned subsidiary to manufacture railway components.
At 12:10 a.m., on Monday’s trade, Amber Enterprises India Ltd shares were trading at ₹3,368 per share, up 0.91 percent from the previous close price on the stock exchange. The company has a market capitalization of ₹11,348 crore.
Amber Enterprises India Limited subsidiary Sidwal Refrigeration Industries Private Limited incorporated a new wholly-owned subsidiary, AT Railway Sub Systems Private Limited, on March 15, 2024. This subsidiary, was formed to specialise in railway components and sub-systems for the rolling stock industry in both domestic and international markets. This development was reported in the company’s exchange filing.
The company specializes in manufacturing durable consumer products, including Room Air Conditioners (RAC), RAC & non-RAC components, and HVAC solutions for mobility applications.
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.
Recently, Amber Enterprises has entered into a partnership with Titagarh Rail Systems, headquartered in Kolkata, to expand into the railway component and subsystem business. Together, they have established a special purpose vehicle (SPV) with the objective of strengthening their market presence in India and Europe.
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.
During April-December, the consumer durables segment remained the primary sales driver, accounting for 72% of total company’s sales, with the remaining 9% attributed to the railways business. Room air conditioners presently contribute approximately 38% of the consolidated revenue.
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.
In the third quarter of FY24, the company acquired a 60% equity stake in Ascent Circuits Pvt. Ltd, a leading manufacturer of PCBs with a manufacturing facility located in Hosur, Tamil Nadu.
Furthermore, the Amber Group has signed a Memorandum of Understanding (MoU) with Korea Circuit, a subsidiary of South Korea’s YoungPoong group, through its recent venture ‘Ascent Circuits.’ This collaboration aims to manufacture Flex, HDI, and semiconductor substrate PCBs, thereby bolstering PCB manufacturing in India.
Written by Omkar Chitnis
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