Amber Enterprises tumbles 11% after net loss widens to Rs 5.6 crore in Q2

Shares of Amber Enterprises tumbled 11 percent to the day’s low of Rs 2,712 on the BSE on October 23 after the company’s net loss widened to Rs 5.6 crore in the September quarter (Q2FY24) as against a loss of Rs 2.2 crore a year ago. The S&P BSE Sensex was down 151 points or 0.2 percent at 65,246 levels, as of 12pm.

In the past one month, the stock of this midcap company has declined 8 percent as against 1 percent drop in the benchmark Sensex.

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The company’s consolidated total income surged 23 percent on-year to Rs 938 crore in Q2FY24 from Rs 762 crore in Q2FY24. However, its total income declined 45 percent on-quarter from Rs 1,721 crore in Q1FY24.

Operating earnings before interest, tax, depreciation, and amortisation (Ebitda) for the quarter, meanwhile, climbed by 25 percent YoY to Rs 65 crore versus Rs 52 crore in the year-ago period.

Segment-wise, consumer durables division contributed the most to revenue build-up, followed by electronics division, and railway sub-systems.

“Q1 which is usually a strong quarter, was impacted by unseasonal weather patterns which lead to increased inventory levels. However, rising temperatures and festivities on the anvil got the demand back and has helped in liquidation of inventory during the quarter gone by, thereby leading to normalised levels of channel inventory,” said Jasbir Singh, executive chairman and chief executive and whole-time director of Amber Enterprises India.

Amber Enterprises, a part of Amber Group, is one of the largest original equipment manufacturer of white goods in India. The company’s product list includes split and window air-conditioners for commercial and residential use, heat exchangers, multi-flow condensers, home appliances like washing machines, refrigerators, and microwaves.

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In an earlier note, analysts at Jefferies shared a ‘buy’ rating on the counter, as they expect the company to yield higher margins due to backward integration, led by faster growth in components, capex commissioning, client addition, and PLI upside.

The global brokerage firm set a target price of Rs 3,740 per share for Amber Enterprises.

On the other hand, those at Sharekhan maintained their ‘buy’ call for Amber Enterprises, building in revenue/PAT compounded annual growth rate (CAGR) of 17/37 percent over FY23-26. “We expect improvement in return ratios and cash flows due to growing profitability, decline in debt, and absence of major capex in the coming years,” they added.

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