Buy Amber Enterprises India, target price Rs 2450: Sharekhan by BNP Paribas

Sharekhan by BNP Paribas has buy call on Amber Enterprises India with a target price of Rs 2450.The current market price of Amber Enterprises India is Rs 2130.65.

Amber Enterprises India, incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 7178.28 Crore) operating in Consumer Durables sector.

Amber Enterprises India key Products/Revenue Segments include Air Conditioners, Job Work, Scrap, Other Operating Revenue for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 3021.31 Crore, up 122.61 % from last quarter Total Income of Rs 1357.24 Crore and up 55.25 % from last year same quarter Total Income of Rs 1946.07 Crore. Company has reported net profit after tax of Rs 108.10 Crore in latest quarter.

The company’s top management includes Mr.Kartar Singh, Mr.Jasbir Singh, Mr.Daljit Singh, Dr.Girish Kumar Ahuja, Mr.Satwinder Singh, Mrs.Sudha Pillai, Mr.Manoj Kumar Sehrawat. Company has Walker Chandiok & Co. LLP as its auditors. As on 31-03-2023, the company has a total of 3 Crore shares outstanding.

Investment Rationale
Despite structural change in the RAC industry, wherein brands are resorting to in-house manufacturing of finished goods, Amber is well placed to capture incremental demand accruing from components ecosystem development. However, the brokerage reckons that decreasing share of RAC finished goods may alter the margin profile of the company for a brief period till non-RAC components gain scalability.
Management remains optimistic about growth in components (including mobility, electronics, and non-RAC components), new customer additions as well as exports in the next 3-4 years. Further, under penetration of RAC, rising temperatures in India, changing lifestyle patterns, and increasing contribution from Tier II, III, IV cities would drive the RAC industry’s growth and benefit Amber indirectly, driving demand for its components.

Promoter/FII Holdings
Promoters held 40.31 per cent stake in the company as of 31-Mar-2023, while FIIs owned 23.91 per cent, DIIs 13.55 per cent.