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“Delivers on guidance”
* AMBER delivered strong numbers by achieving its annual RAC guidance of 2.11mn units for FY19. Q4FY19 volume growth was 43% yoy (-7% for 9MFY19), driven by new customer additions and increased wallet share from existing customers.
* The revenue impact of the new customer additions will be fully reflected in FY20 as the majority of the additions happened in 4Q. New customers have been added with higher credit terms (60-90 days), while management believes they offer better PBT contribution.
* Q1FY20 volume growth outlook remains robust at 25-30%, and management remained confident on outpacing RAC industry volume growth by 4-5% in FY20. We are estimating 15% RAC volume growth for Amber in FY20E.
* Our revenue/EBITDA/PAT CAGR estimates for FY19-21 stand at 21%/31%/32% as our estimates bake in the consolidation of Sidwal and EVER from FY20. Maintain Buy with a target price of Rs1,072 (10x FY21E EV/EBITDA).
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