Amber Enterprises India - Q4FY21 First Cut - ICICI Direct

(CMP : Rs. 3006, MCap: Rs. 10129 crore)

Amber Enterprise witnessed a strong business recovery in Q4FY21 led by both RAC and component & mobility business.

Q4FY21 Earnings Summary

Amber Enterprises reported consolidated revenue growth of ~22% YoY to Rs. 1598 crore led by ~16% and ~32% YoY revenue growth in RAC and components & mobility segments respectively

The gross margin declined by 80 bps YoY mainly due to higher raw material prices. Saving in employee costs and other expenses by 40 bps and 140 bps YoY respectively helped drive EBITDA margin up 110 bps YoY to 8.8% in Q4FY21

Finally, company witnessed a sharp recovery in PAT which came in at Rs. 77 crore in Q4FY21, higher by ~22% YoY. This was supported by higher sales and improved EBITDA margin, during the period

H1FY21 was a challenging period with uncertainties and complexities brought by covid-19 pandemic for AC industry. However sharp recovery enabled company to post strong performance in H2FY21 and company managed to reach 75% of pre-Covid sales in FY21. We like Amber for its leadership position in the RAC OEM/ODM industry in India with a strong customer base. Focus on component business provides Amber an edge over the competition to acquire new customers and increase the wallet share of existing customers. We also believe, ban on import of finished room AC (RAC) and Production linked incentive schemes on components are likely to create significant business opportunities for Amber Enterprises going forward. We await management commentary on near term challenges and impact of raw material inflations on profitability amid second wave.

Shares of Amber Enterprises India Ltd was last trading in BSE at Rs.2930.1 as compared to the previous close of Rs. 3006.2. The total number of shares traded during the day was 16874 in over 4619 trades.

The stock hit an intraday high of Rs. 3059 and intraday low of 2922. The net turnover during the day was Rs. 49678486.

Source : Equity Bulls

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