Amber Enterprises Q3 Results Review - Strong Growth In Components: Dolat Capital

Dolat Capital Report

Amber Enterprises India Pvt Ltd.’s Q3 FY23 revenue and Ebitda were ahead, while profit after tax missed expectation. Revenue (consolidated) grew 38% YoY in Q3 driven by strong growth in components (up 86%) and subsidiaries (up 40%).

The room AC industry witnessed tepid demand in Oct-Nov-22, sales began picking up from mid-Dec-22. Expectation of good summer season from Feb end is expected to fuel RAC demand.

Management has guided for up 30% YoY growth in absolute Ebitda for next two to three years, which will help improve return on capital employed by 200-300 bps.

We have cut our earnings per share estimates for FY23/24/25E by 11/7/4% respectively to factor in weak Q3 bottom line.

Amber Enterprises is a major beneficiary of the production linked incentive scheme for AC components. New client addition, focus on components, capacity augmentation and thrust on exports will augur well in the medium to long term.

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