Growth guidance firm for Amber Ent, says BNP Paribas; retains 'Outperform'

The brokerage believes Amber Enterprises is on track to deliver its USD 1 billion electronics revenue guidance by FY29, with significant margin upside driven by recent acquisitions

Global brokerage BNP Paribas has reiterated its bullish stance on electronics manufacturing services (EMS) player Amber Enterprises India, retaining its ‘Outperform’ rating and continuing to flag the stock as its preferred pick in the EMS space following the company’s recent analyst meeting.

 

At the meet, Amber’s management expressed confidence in achieving CD (consumer durables) sales growth of around 13–15 per cent in FY26, supported by the current RAC order book. However, it cautioned on near-term margin pressure due to a recent spike in commodity prices and foreign exchange impact, which is generally passed through with a one-quarter lag.  "The company seems on track to deliver its $1 billion revenue guidance in electronics by FY29, with a significant margin boost potential on the back of recent acquisitions. Retain O/P as a preferred pick within EMS," said BNP Paribas in its report. 

 

 

The brokerage has assumed lower margins (except in FY28) and higher finance costs, resulting in a 2–8 per cent cut in FY26–28E EPS and a 2 per cent reduction in its sum-of-the-parts (SoTP)-based target price to ₹8,400 per share, which implies and upside of 27 per cent from current market price of ₹6,626 per share.

Confident of FY26 CD growth; near-term margin pressure

BNP Paribas highlighted that Amber expects CD sales growth to pick up, with an implied second-half growth rate of around 12–15 per cent year-on-year, driven by a strong order book, higher demand, lower channel inventory for exclusive brand customers, and partial RAC pre-buying ahead of the BEE rating change. However, the company flagged caution on 3QFY26 margins due to a recent 6–7 per cent increase in input costs, with pass-through expected from 4QFY26.

Shogini acquisition strengthens PCB footprint

Amber recently acquired around an 80 per cent stake in Shogini Technoarts for approximately ₹500 crore. Similar to Ascent, Shogini manufactures multi-layer PCBs (up to 16 layers) but has a more diversified exposure compared to Ascent’s largely auto-focused mix. Amber maintained the commissioning timeline for Ascent’s ₹650 crore facility by 3QFY27, while approvals are awaited for the Korea Circuit JV, with revenue expected from 2HFY28.

 

The brokerage noted that PCB margins remain under near-term pressure due to higher raw material costs, including copper clad laminate (CCL) and gold prices. However, Amber aims to achieve an Ebitda margin of around 8–9 per cent in electronics in FY26 (1HFY26: around 6.2 per cent), aided by consolidation of Power-One (around 15–18 per cent), Unitronics (around 25–28 per cent) and Shogini (around 17–19 per cent).

EPS estimates trimmed on higher capex assumptions

BNP Paribas pointed out that Amber has retained its FY26 capex guidance of around ₹800 crore and expects annual capex of ₹1,600–1,700 crore over FY27–28, along with working capital days of 25–35. Based on its assumptions of lower margins and higher finance costs, the brokerage has cut FY26–28E EPS by 2–8 per cent and reduced its SoTP-based target price by 2 per cent, while retaining its ‘Outperform’ rating on the stock. 

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