Amber Enterprises: An Analysis by Nuvama
Key Points
- Nuvama recommends ‘Buy’ with ₹9,100 target, strong consumer growth.
- Acquisition and costs considered, minor earnings adjustments predicted.
- Consumer durables outperform, aiming for significant growth gains.
- Margin pressures exist due to rising costs and new regulations.
- Electronics division expects rapid expansion to $1 billion by 2029.
- Mobility division poised for growth with rail projects accelerating.
Amber Enterprises – The Investment Case
Nuvama Institutional Equities, a brokerage firm, has given Amber Enterprises a strong “Buy” rating, suggesting investors should buy the stock. Their target price is ₹9,100. This recommendation is based on the company’s promising performance in several key areas, particularly its consumer durable segment.
Why Nuvama is Bullish
The brokerage believes Amber Enterprises is doing well because its consumer durable division is growing faster than the overall industry. Even though the broader industry hasn’t been doing so great, Amber’s consumer products are still growing strong. Amber is planning to grow this division by a lot in the coming years, aiming for double-digit growth when other companies are only expecting flat growth.
Considering the Costs
However, Nuvama acknowledges that there are some challenges. The company has recently acquired another business, and the cost of raw materials is going up. Because of these things, the brokerage predicts a slight decrease in the company’s earnings. They expect this to happen over the next few years.
The Electronics Business is Booming
Amber Enterprises is also doing very well in its electronics business. The company is planning to grow its revenue quickly and aims to reach $1 billion by 2029. They also expect their profits to increase over time, driven by things like making more parts themselves, working together more efficiently, and selling more products.
Rail Projects Will Help
Amber Enterprises also makes parts for trains. The company supplies HVAC systems, pantries, and other equipment for the Vande Bharat and metro rail projects. These projects are expected to grow in the coming years, which will also benefit Amber Enterprises.
“Amber Enterprises is positioning itself as a major player in the Indian electronics manufacturing services sector.”
