PL Stock Report - Amber Enterprises India (AMBER IN) - Management Meet Update - Component business reduces impact of RAC slowdown - Not Rated
Amber Enterprises India (AMBER IN) - Praveen Sahay - Research Analyst, Prabhudas Lilladher Pvt Ltd
Rating: Not Rated | CMP: Rs 2,258 | TP: NA
Management Meet Update - Component business reduces impact of RAC slowdown
We met with management of Amber Enterprises India (Amber) to gauge 1) demand scenario in RAC sector in its season’s strong quarter, 2) progress in Amber’s business diversification & capacity ramp-up and 3) margin profile post business diversification. RAC sector saw slugging demand in Q1FY24, as per management, while Amber is expecting growth on account of increase in its component manufacturing business and association with most brands besides its component supply.
The company reported Revenue/EDITDA/PAT CAGR of 27%/18%/21% over FY18-23. Management expects RAC components contribution to increase from 30% to 50% and Mobility division to reach Rs10bn in next 5years. Also, Electronics and Motors division expected revenue growth of 30-35% in FY24. Amber is trading at 38x/28x on FY24/FY25E consensus earnings. We don’t have rating on stock.