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Demand up QoQ; near-term RM headwinds visible

Our recent interaction with Amber Enterprises management indicates that 1) consumer durable demand has improved sequentially, while there is still channel inventory in the system for RAC; 2) electronic division growth will outperform other segments led by new client additions and acquisitions; and 3) railway segment performance will see only gradual improvement this year. RAC industry is currently impacted by a change in rating norms, which has resulted in higher costs and higher product prices. Industry is also impacted by a steep rise in the copper prices, which can be passed on only after a lag of a quarter. In FY26, Amber expects to 10-15% YoY growth in RAC segment and 35-40% YoY growth in electronics segment. We reduce our margin assumption and cut estimates by 10%/9%/5% for FY26/27/28. Maintain BUY with a revised DCF-based twoyear forward TP of INR8,000 (INR8,400 earlier).

Key takeaways from analyst meet

Consumer durables demand up QoQ; facing RM headwinds

Consume durable segment demand has recovered on QoQ basis, but the RAC industry is still facing inventory issues. The company expects growth to pick up during 2HFY26, with a likely rebound expected during 4Q. Channel inventory remains high in the system. However, RAC industry will also witness BEE rating change from 1st Jan’26, leading to higher product prices, and hence, demand for earlier-rating products can see further uptick in the remaining 3QFY26. Higher copper prices and currency fluctuations can dent margins as these costs are generally passed on with a quarter’s lag. Overall, Amber expects to outperform industry growth by 10-15% as RAC industry is likely to remain flat in FY26 and as the company has expanded its product portfolio, which now includes a full CAC range up to 17.5 tons, and is scaling up component business. We expect consumer durable segment to grow by 11% in FY26.

Key takeaways from analyst meet

Consumer durables demand up QoQ; facing RM headwinds

Consume durable segment demand has recovered on QoQ basis, but the RAC industry is still facing inventory issues. The company expects growth to pick up during 2HFY26, with a likely rebound expected during 4Q. Channel inventory remains high in the system. However, RAC industry will also witness BEE rating change from 1st Jan’26, leading to higher product prices, and hence, demand for earlier-rating products can see further uptick in the remaining 3QFY26. Higher copper prices and currency fluctuations can dent margins as these costs are generally passed on with a quarter’s lag. Overall, Amber expects to outperform industry growth by 10-15% as RAC industry is likely to remain flat in FY26 and as the company has expanded its product portfolio, which now includes a full CAC range up to 17.5 tons, and is scaling up component business. We expect consumer durable segment to grow by 11% in FY26.

Electronics segment growth to be stronger than other segments’ growth

During the quarter, the company also announced a majority stake purchase in Shogini Technoarts, a PCB manufacturer, for nearly INR5b. Including Powerone and Unitronics, the company has invested close to INR12.5b in acquisitions. It has also received ECMS approval for INR9.9b capex from Ascent Circuits for multi-layer PCB, and the approval for Korean circuit JV is expected to come in a few days. We expect the electronics segment’s growth to be driven by PCB and PCBA segments, along with the consolidation of these acquisitions. Margins in this segment, especially in ascent circuits and Shogini Technoarts, can be impacted by higher copper clad laminate and gold prices in the near term as it takes around 2-2.5 quarters to pass on the RM price hike. We expect a revenue CAGR of 38% over FY25-28, with margins expanding to double digits by FY28, aided by a shift in the mix to higher-margin businesses such as Power-One (15- 18%), Unitronics (25-28%), Shogini (14-16%) and bare PCBs (17-19%).

Railways segment to revive in FY27

We expect railway segment growth to remain impacted during FY26 and we expect it to start ramping up from FY27. Despite a weak performance so far in railways, management remains confident of doubling revenue over the next two years, backed by a strong INR26b order book and expected inflows of another INR4b-5b. Near-term momentum will come from: 1) Sidwal’s greenfield HVAC facility trials beginning in 3QFY26 and commercial operations in 4QFY26; 2) Yujin Machinery JV for pantographs, brakes, and couplers to start production in 1HFY27. We expect railways division to clock a revenue CAGR of 23% over FY25-28, with margin to sustain around 18.5% for FY27/28.

Financial outlook

We cut our estimates by 10%/9%/5% each for FY26E/27E/28E to factor in slightly weaker margins. We, thus, expect revenue/EBITDA/PAT to post a CAGR of 20%/28%/46% over FY25-28 for AMBER.

Valuation and recommendation

The stock currently trades at 81.4x/45.9x/30.9x P/E on FY26E/27E/28E earnings. We cut our estimates and reiterate our BUY rating on the stock with a revised DCFbased TP of INR8,000 (earlier INR8,400).

Key risks and concerns

Key risks and concerns include lower-than-expected demand growth in the RAC industry; change in BEE norms making products costlier; change in announced capex policy; and increased competition across the RAC, mobility, and electronics segments.

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