Overview:

Axis Direct, a prominent financial services firm, maintains its ‘Buy’ call on Amber Enterprises India, a leading consumer electronics manufacturer. The target price is set at Rs 3,700, indicating a substantial upside of 19.1%. The company’s robust growth outlook across all segments has contributed to strong earnings visibility from FY23 to FY26.

Segmental Growth and Earnings Visibility:

Amber Enterprises has reported a robust growth outlook across its diverse segments, providing a solid foundation for earnings visibility. Analyst Akshay Mokashe emphasizes the rising contribution from the Railway and Mobility (R&M) division, which boasts higher operating margins. This division is anticipated to play a key role in improving operating profits in the upcoming quarters.

Strategic Joint Ventures and Market Expansion:

The electronics division of Amber Enterprises has experienced a remarkable revenue growth at a 48% Compound Annual Growth Rate (CAGR) over the period H1FY21-H1FY24. Mokashe attributes this growth to the strategic joint venture with NOISE, facilitating market expansion in the wearables segment and other smart electronics categories.

Optimistic Projections:

Mokashe maintains an optimistic outlook for Amber Enterprises, citing a robust order book in the R&M division, an increase in value-added products, and improving operating leverage. These factors are expected to drive higher Return on Equity (ROE), Return on Capital Employed (ROCE), and operating margins by FY26. The analyst projects a revenue and Profit After Tax (PAT) Compound Annual Growth Rate (CAGR) of 15% and 34%, respectively, over the period FY24-26.

Conclusion:

Axis Direct’s ‘Buy’ rating on Amber Enterprises India underscores the company’s strong growth trajectory and positive outlook. Investors are encouraged to consider the promising prospects of Amber Enterprises, as highlighted by the robust order book, strategic ventures, and anticipated improvements in key financial metrics.

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