Summer demand, capacity additions underpin Geojit's bullish call on Amber

Brokerage firm Geojit Investments has initiated coverage on Amber Enterprises India with a ‘Buy’ rating, citing expectations of sustained market share gains in the domestic room air conditioner (RAC) segment. The brokerage believes expansion in the high-margin PCB business, along with ongoing backward integration initiatives, will enhance earnings visibility and support margin improvement.

 

At the current market price (CMP) of ₹7,649, Antu Eapan Thomas, senior research analyst at Geojit, sees a 20 per cent upside and has set a target price of ₹9,156 per share, valuing the stock at 43x FY28E earnings. He noted that Amber Enterprises is currently trading at a one-year forward P/E of 55x, close to the +1 standard deviation band.

 

 

The brokerage highlighted that post-FY24, Amber witnessed a re-rating in valuations, led by strong capacity additions in the consumer durables and high-margin electronics segments. Diversification across consumer durable portfolios, including refrigerators, washing machines, automobiles, and AC components, supported sustained growth.

 

With rising demand for consumer durables and improving penetration, alongside margin expansion, Geojit expects the company’s earnings to grow at a 35 per cent CAGR over FY26E–FY28E.

 

“A strong Q3FY26 performance, aided by RAC channel filling due to BEE rating changes and continued growth momentum in the electronics segment, added positive sentiment to the stock price,” said the brokerage. It expects demand to pick up on expectations of a better summer season, with robust earnings growth, margin expansion, and improving return on equity (RoE) supporting valuations.  READ | Nomura upbeat on private port players; bets on JSW Infra, Adani Ports

Here are the other investment rationales Geojit has highlighted in support of its bullish call on Amber Enterprises:

Amber Enterprises derives 73 per cent of its FY25 revenue from its consumer durable business (RAC and components). Geojit expects this segment to remain the key revenue driver and projects a healthy 22 per cent CAGR over FY26E–FY28E.

 

The company is aggressively scaling up its PCB/PCBA capacity to diversify its revenue mix and tap rising demand in the domestic electronics market. The brokerage expects the electronics segment to deliver a strong 30 per cent CAGR over FY26E–FY28E, with growth likely to accelerate further as new capacities come on stream.

 

Geojit has further highlighted that through its subsidiary ILJIN Electronics, the company has acquired a majority stake in Unitronics and Shogini, expanding its portfolio to include PLCs, motion control solutions, and related industrial automation products.  ========================================= 

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