Amber Enterprises soars 8%, hits record high on hopes of strong AC volumes

Shares of Amber Enterprises hit a record high of Rs 4,023.65, surging 8 per cent on the BSE in Monday’s intra-day trade in an otherwise weak market on expectation of strong room air conditioner (AC) volumes with the onset of summer and heat waves across various parts of the country.

The stock of AC maker surpassed its previous high of Rs 3,932 touched on February 3, 2022. At 01:24 PM, the stock traded 7 per cent higher as compared to 0.41 per cent decline in the S&P BSE Sensex.

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.

For October-December quarter (Q3F22), the company had 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 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.

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. Cooling products (RACs) are expected to grow 23.4 per cent YoY, aided by strong inventory push. Amber expected to see healthy YoY revenue growth, driven by recovery in RAC volumes.

“For January-March quarter (Q4FY22), Amber’s AC volumes should see robust growth of 45 per cent YoY due to good order flow from OEMs. This, along with higher prices, should drive overall revenue growth at 50 per cent YoY, offsetting lower growth at components (+25 per cent YoY). Gross Margin and EBITDAM should remain stable at 15.9 per cent/8.9 per cent respectively YoY. PAT will grow by a higher 69.5 per cent YoY due to lower tax rate versus last year,” analysts at Emkay Global Financial Services said in consumer durable sector update.