Amber Enterprises trades 3% lower on muted Q1 earnings

Shares of Amber Enterprises India Ltd declined by over 3 percent to Rs 2,196.40 at 9:31am on July 26 after the company announced a weak set of results for the quarter ended June amid slowdown in demand.

The company reported a 7 percent decline in revenue from operations at Rs 1,702 crore in June 2023 from Rs. 1,826 crore a year back, though its quarterly net profit increased 9 percent to Rs 47 crore from Rs 43 crore. Its operating earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at Rs 138 crore in June 2023, up 6 percent from Rs 131 crore last year.

The company’s RAC & Components division saw some improvement in margins during the quarter, despite unseasonal weather patterns, thanks to a component strategy that led to a change in product mix.

The first-quarter performance has been muted so far, with weak demand owing to unseasonal rains and weather patterns. Channel inventory is elevated and expected to return to a normalised level by the end of Q2FY24, according to the regulatory filing.

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“The first quarter, which is usually a strong quarter for the RAC industry, was marred by unseasonal rains and weather patterns. Owing to the muted demand that the industry witnessed, the channel inventory stood at elevated levels and is expected to come down to normalized levels by the end of Q2FY24,” said Jasbir Singh, Executive Chairman and CEO, and Whole-time Director of Amber Enterprises India Ltd.

Singh added that they are committed to creating synergies through strategic collaborations and exploring new opportunities to expand their presence. They expect the mobility division to perform exponentially well given that the transport infrastructure industry is poised to witness substantial growth.

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