Why Amber Enterprises Share Price is Rising

India's electronics sector is witnessing unprecedented growth. It is driven by the surge in demand for consumer electronics and the government's push toward local manufacturing under schemes like 'Make in India' and Production Linked Incentive (PLI).

As people increasingly adopt smart technologies, the market for electronic goods is booming. With rising disposable incomes and a youthful, tech-savvy population, this sector is poised for exponential expansion.

Amber Enterprises, a leading contract manufacturer in India's electronics sector, specialises in air conditioners and their components. The company supplies to major brands and operates on a large scale, focusing on cost efficiency and quality production.

Recently, Amber has caught the attention of investors, with its share price rallying 15% over the past five days and it surged 40.8% in the last six months.

Let's find out what's driving this surge.

#1 Strong Growth in the AC Segment

Amber Enterprises is reaping the benefits of a strong summer season, especially in the domestic air conditioner (AC) segment. The company expects a robust performance in FY25, with the AC industry likely to grow over 30% in volumes year-on-year.

Amber is confident in achieving sustained growth, projecting a compound annual growth rate (CAGR) of 17% over the next seven years.

This will be primarily driven by under-penetration in the Indian market and the rising temperatures, which are leading to higher demand for cooling solutions.

The company's strong position in the AC segment, coupled with favourable market trends, has played a key role in boosting its share price. Amber is capitalising on the growing demand, positioning itself to capture a larger market share in the years to come.

#2 Electronics Vertical Expansion Fuelled by Anti-Dumping Duties

Amber Enterprises has also gained significant traction in its electronics business, particularly due to the imposition of anti-dumping duties (ADD) on printed circuit boards (PCBs).

This has allowed the company to acquire new clients and expand its customer base. The company's operating profit margins (OPM) have improved considerably, now standing at around 7-8%, up from 4% just two years ago.

Amber has set ambitious growth targets for this segment, aiming for over 45% expansion, surpassing market estimates.

The improved profitability in its electronics division, along with its ability to attract new customers, has strengthened investor confidence.

The growth in this vertical has directly contributed to the rising share price as the market sees the potential for sustained long-term profitability in this segment.

#3 Promising Future of the Mobility Segment

Amber's mobility division is also showing strong potential. As on 30 June 2024 the company's order book stands at Rs 20.7 billion (bn), and the management is optimistic about doubling sales within the next three years.

This healthy order pipeline and positive long-term outlook are providing further support for the company's share price.

The mobility segment, along with the company's solid performance across other business areas, is strengthening sentiment of brokerage houses, leading to a rise in the share price.

Amber's diversified growth strategy is playing a pivotal role in its stock's upward trajectory.

What Next?

Amber Enterprises is set to enhance its market position through strategic diversification and targeted expansion.

The company plans to leverage its recent joint ventures and acquisitions to strengthen its offerings across various industries.

By focusing on building strong partnerships and developing new products, Amber aims to capture significant market share in emerging sectors.

The company's commitment to research and development will be crucial in introducing innovative solutions that cater to diverse consumer needs. By enhancing its product portfolio and offering ODM solutions, Amber seeks to position itself as a leader in the consumer durables space.

This proactive approach will allow the company to stay ahead of market trends and meet the evolving demands of customers.

In addition, Amber Enterprises is focused on expanding its footprint in the defense sector. With a growing order book and an emphasis on local manufacturing, the company is poised to become a key player in this critical industry.

The anticipated development of air conditioning systems for railways and international markets will provide new revenue streams and growth opportunities.

How Amber Enterprises Share Price has Performed Recently

In the past five days, Amber Enterprises share price has rallied 15.1%. In the last month, it is up 17.2%.

In 2024, so far its share price has surged 58.4% and it has rallied 67.6% in the last year.

The stock touched its 52-week high of Rs 5,364.6 on 24 September 2024 and a 52-week low of Rs 2,712.1 on 23 October 2023.

About Amber Enterprises

Amber Enterprises India produces heating and ventilation equipment.

The company dominates the original equipment manufacturer (OEM) and original design manufacturer (ODM) market for room air conditioners in India.

The company is engaged in the business of manufacturing consumer durable products. It designs and produces a wide range of goods, such as HVAC solutions and RAC, RAC, and non-RAC components for mobility applications.

Additionally, it produces multi-flow condensers, inverter and non-inverter printed circuit boards, heat exchangers, motors, and other essential and reliable functional components for RACs.

It currently has 23 production facilities spread over 8 locations in India, allowing for quick turnaround.

For more details about the company, you can have a look at Amber Enterprises India's company fact sheet and quarterly results.

You can also compare Amber Enterprises with its peers.

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Happy investing!

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