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A mixed performance

Amber Enterprises (AMBER)’s 1QFY27 results were mixed with lower-than-expected revenue growth and better-than-expected margins, which aided PAT. Revenue growth across segments remained healthy, driven by strong demand but margins were hit by higher commodity prices, currency depreciation, and a sharp hike in minimum wages in Haryana. The company is continuously incurring capex across divisions to scale up capacity. Regarding its diversification into the mobile segment, AMBER expects a volume ramp up to 7-8m unitsin FY28 and 14-15m units in FY29. We incorporate 1QFY27 results and Oppo volumes into our estimates. We reiterate our BUY rating with a revised twoyear forward DCF-based TP of INR8,250

Miss on revenue and EBITDA, in-line margins and adj. PAT

Consolidated revenue grew 13% YoY to INR39b, 14% below our estimate. This was supported by growth across all segments. The gross margin expanded 310bp YoY to 18.8% vs. our estimate of 16.0%. Absolute EBITDA increased 22% YoY to INR3.1b (vs. our est. of INR3.4b), while the EBITDA margin expanded 60bp YoY to 8.0%, broadly in line with our estimate of 7.9%. Margins during the quarter remained under pressure due to elevated commodity prices and sharp increase in minimum wages in Haryana. Adj. PAT increased 40% YoY to INR1.5b vs our estimate of INR1.4b. While revenue was below our estimates, PAT came broadly in-line with our estimates supported by an in-line EBITDA margin, higher-than-expected other income, and slightly lower tax rate.

Consumer durables demand to normalize in the near term

Consumer durables revenue grew 8% YoY, which appears moderate due to a high base of last year. Margins remained healthy at 7.8% despite commodity inflation, supported by low-cost inventory, a product mix increasingly skewed toward premium categories and a growing contribution from light commercial ACs. The industry is currently carrying mixed inventory following the mandatory tonnage disclosure requirement from Jul’26, with different wattage products available within the same tonnage category, which has temporarily disrupted ordering patterns. Inventory is expected to be largely liquidated by Diwali, which may have some impact during the peak Diwali sales season, while demand is expected to normalize thereafter with a stronger summer season starting from Nov’26. For FY27, the company has guided for the segment’s growth to track the RAC industry growth of 13-15%, although quarterly margins will remain sensitive to the product mix and commodity prices. We expect the segment to clock a CAGR of 14% over FY26-29 with EBITDA margins of 6.5%/7.0%/7.5% for FY27/ FY28/FY29E.

Electronics segment scaling across verticals

Electronics segment’s revenue grew 29% YoY to INR9.9b in 1QFY27, while margins remained healthy at 10.8%. Growth remained broad-based across PCBA, PCB and industrial & automation, with PCBA benefiting from new customers and applications, PCB positioned as an import-substitution opportunity, and the industrial segment gaining traction across PLCs, HMIs, solar inverters and UPS products. Within PCBA, growth was temporarily moderated by elevated customer inventory in consumer durables, some customers shifting from sales to job-work arrangements, and weakness in smart meters and smartwatches. The acquired Unitronics, Shogini, and Power-One businesses are also scaling well, strengthening the value-oriented portion of the portfolio. AMBER also intends to add medical, defence and aerospace applications over the next 3-4 years. PCB margins (currently ~12%) remain temporarily depressed by higher CCL costs and a Tier-2 pass-through lag of two quarters, but they are expected to recover from 3QFY27 toward the normalized 15-16% range. The company has maintained the segment’s FY27 revenue growth guidance of ~40% despite the recent ILJIN facility fire incident, supported by production diversification across locations, while margins are expected to remain above double digits as the portfolio shifts toward value-added products. We expect the segment’s revenue to record a CAGR of 80% over FY26-29, supported by the Oppo mobile addition.

Financial outlook and valuation

We cut our estimates by 14%/2% for FY27/28. We factor in the 1QFY27 performance on revenue and margin for FY27, and incorporate Oppo volumes from FY28 onwards. Consequently, we expect a revenue/EBITDA CAGR of 39%/32% over FY26-29, with margin of 7.8%/6.4%/6.7% in FY27/FY28/FY29, leading to a PAT of INR3.8b/INR6.4b/ INR9.5b. The stock currently trades at 67.7x/39.7x/26.8x P/E on FY27E/28/29E earnings. We reiterate our BUY rating with a revised two-year forward DCF-based TP of INR8,250.

Key risks and concerns

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

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