Amber Enterprises hits 52-week low; sheds 9% in four days post Q2 loss

In Q2FY23, Amber reported a net loss of Rs 2.3 crore as against profit of Rs 8 crore in the year ago period, dragged by fall in EBITDA margin and higher interest costs.

Shares of Amber Enterprises India hit a 52-week low of Rs 1,996.05, down 3 per cent on the BSE in Thursday’s intra-day trade in an otherwise firm market. The stock of the company engaged in air conditioning business has declined 9 per cent in past four days after the company reported weak operational performance in September quarter (Q2FY23). The stock quoted lower for the sixth straight trading day, down 11 per cent during the period. In comparison, the S&P BSE Sensex was up 0.50 per cent at 59,841 points at 09:53 AM.

The stock also fell below its previous low of Rs 2,029.80, touched on June 20, 2022. The market price of the company has halved or tanked 50 per cent from its 52-week high of Rs 4,023.65 on May 2, 2022.

Amber Enterprises is a market leader in Indian Room Air Conditioner (RAC) industry and Air Conditioning industry for Mobility Application such as Railways, Metros, Buses etc. The company has a diversified portfolio which includes RACs, RAC Components and Air conditioning solutions for Railways, Metro’s, Defence, Bus & Commercial segment.

In Q2FY23, Amber reported loss of Rs 2.3 crore as against a profit of around Rs 8 crore dragged by sharp fall in EBITDA margin and higher interest costs. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margin fell 95 bps year-on-year (YoY) to 4.9 per cent dragged by one-time forex losses of Rs 7.5 crore and other operating costs associated with new plant.

For Q2FY23, there was an increase in finance cost to Rs 24 crore as compared to Rs 6 crore in Q2FY22. The increase in finance cost is largely due to capex incurred during the period and increase interest rates, resulted in a loss in Q2FY23, Amber Enterprises said.

Favourable base and strong demand for components (aided by new customer additions) resulted in consolidated revenue growth of 28 per cent YoY to Rs 750 crore. “Strong demand, low penetration, changing lifestyle patterns and increasing contribution from Tier II,III,IV cities have added substantially to the growth of the RAC industry and thereby benefitting Amber,” the company said

The AC industry is likely to grow 30 per cent YoY in FY23E supported by a revival in real estate industry and changing lifestyle. Amber, having the largest market share of around 26 per cent (in terms of bills of materials), will be a major beneficiary of increased RAC demand, analysts at ICICI Securities said in result update.

With the component business contributing around 50 per cent to its topline, Amber is a major beneficiary of the PLI scheme provided by Government of India. The new export opportunities (of components) in the US and Middle East, the brokerage firm said.