YES Securities' research report on Amber Enterprises
AMBER delivered better than expected revenue growth while missing the margin estimates. Business from new customers has resulted in higher-than-expected revenue growth. There was strong demand across the business segments with subsidiaries faring better. Growth in subsidiaries was enhanced by new customer additions and increase in wallet share from the existing customers. The company’s market share in RAC and its components has increased to 29% in FY23 vs 26% in FY22. Amber is witnessing increased traction in new businesses like wearables and hearables this coupled with new opportunities in the telecom communication equipment space should arguer well for the company going forward. We have increased revenue estimates, by 5% each for FY24 and FY25 on back of increasing wallet share from the existing customers and new customer addition. We however continue to maintain our positive stance; considering major capex cycle is behind and return ratios will start improving. We maintain BUY on the stock with revised PT of Rs2,614. We believe AMBER’s focus on enhancing its capabilities on the components side is bearing fruits as it is able to increase wallet share from its existing customer despite multiple brands setting up own manufacturing. Further, entry into newer segments of wearables, hearables, telecom products and exports will give further boost to the revenues.
Outlook
We now estimate Amber’s Revenue/EBITDA/PAT to grow at 13%/26%/46% CAGR over FY23-25E. We continue with our positive stance on stock; and maintain BUY on the stock with revised PT of Rs2,614 valuing the company at 30x one year forward.
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