Amber Enterprises hits record high; stock rallies 27% in one week

In Q3FY22, the company's revenue, Earnings before interest tax and depreciation and amortization (EBITDA) and profit after tax (PAT) surpassed the pre-pandemic level.

Shares of Amber Enterprises hit a new high of Rs 3,932, as the stock rallied 10 per cent on the BSE in Thursday’s intra-day trade in an otherwise weak market. The stock surpassed its previous high of Rs 3,788.40 touched on October 12, 2021. In comparison, the S&P BSE Sensex was down 1 per cent at 58,962 points at 02:51 pm.

In the past one week, the stock of the consumer electronics company has soared 27 per cent after it reported a better-than-expected operational performance as revenue, Earnings before interest tax and depreciation and amortization (EBITDA) and profit after tax (PAT) surpassed the pre-pandemic level in the December quarter (Q3FY22).

In Q3, the company’s revenue grew 27 per cent year-on-year (YoY) at Rs 974 crore. PAT jumped 17 per cent YoY at Rs 17 per cent. However, ebitda margin contracted 60 bps at 7.6 per cent from 8.2 per cent in Q3FY21. The company said rising raw material prices and supply chain issues continued to plague the quarter.

Amber Enterprises is a market leader in domestic room air conditioner (RAC) industry and air conditioning industry for mobility applications such as railways, metros, buses etc.

With a surge in demand for air-conditioned coaches and many forthcoming metro projects around the country, the company said it has also strengthened its product portfolio for railways, metros, and bus air conditioning in Sidwal.

Its management reiterated its FY22 RAC volume guidance of 3mn (implying 62 per cent YoY growth in Q4) and the doubling in revenues of subsidiaries in the next two years. The industry is expected to see volumes of 6.3-6.5 million units in FY22 vs. earlier expectations of 6.5-6.8 million.

Analysts at Emkay Global Financial Services also estimate that its components business will double in the next two years, in line with management guidance. "That said, its execution and delivery are critical for premium valuations, as our estimates are baking in fairly optimistic assumptions," the brokerage said in a results update. However, the stock was trading above analysts target price of Rs 3,300 per share.

Meanwhile, Amber Enterprises has acquired 60 per cent stake in the Pravartaka Tooling Services Private Limited (“Pravartaka”), which is engaged in the business of injection mould tool manufacturing and injection moulding components manufacturing for various industries.

This acquisition will help the company to have inhouse capability of injection molding tools manufacturing and grow its component segment with focus on providing more diversified solution of injection molding component for industries such as automotive, electronics & consumer durable, it said.