After growing over 55% in six months, this consumer durables stock may be headed even higher

Amber Enterprises India (AMBER) shares have rewarded investors with a return of 55.5 per cent in the six months, and counting, sharply outperforming headline index Nifty and sectoral gauge Nifty Consumer Durables’ rise of 20-odd per cent and 23.6 per cent, respectively. Can you expect more upside in the consumer durables stock in the near term?

Several analysts are upbeat on the stock of Mumbai-headquartered Amber Enterprises, banking on the company’s revenue visibility given its strong overall order book and potential growth in the high-margin railway and mobility (R&M) unit. The stock registered a record high of Rs 4,026 apiece in May 2022.

While consumer durable stocks have a weight of 3.2 per cent in the Nifty50, Amber Enterprises carries a weight of 2.3 per cent in the Nifty Consumer Durables, where Titan (32.9 per cent), Havells (13.8 per cent) and Dixon Tech (9.8 per cent) together account for 56.5 per cent.

Should you buy, sell or hold Amber Enterprises India (AMBER) shares now?

Zee Business analyst Ashish Chaturvedi has a ‘buy’ call on Amber Enterprises with a three-month target of Rs 3,500.

Axis Securities, which has a ‘buy’ rating on Amber with a target of Rs 3,700, is positive on the company’s:

• Robust order book in its R&M division
• Increasing value-added products
• Improving operating leverage

The brokerage’s target implies an upside of 8.8 per cent in Amber Enterprises shares as of January 9.

Axis Securities expects the three to lead to a 130-basis-point boost in its operating margin to 7.3 per cent by FY26, with improvement in return on equity (RoE) and return on capital employed (RoCE) to 15 per cent and 16 per cent, respectively, analysts at the brokerage wrote in a research report dated December 26.

It expects Amber’s increasing revenue from the R&M division, which contributes 11 per cent to the company’s total revenue, to improve its overall operating profits moving forward, and sees the segment’s pie expanding to 16 per cent by FY26.

Foreign brokerage CLSA has a ‘buy’ call on Amber with a target of Rs 3,650 apiece, which suggests a 7.3 per cent upside in the stock.

Meanwhile, ICICI Securities maintains a ‘hold’ call on Amber with a target of Rs 2,920. The brokerage pegs Amber’s CAGRs for revenue and PAT at 19.4 per cent and 35.1 per cent over FY23-FY25, respectively. It expects favourable tailwinds present in mobility and electronics to boost the respective segment performances for the company.

While Axis Securities values the company at 33 times its FY26 earnings per share, ICICI Securities does so at a price-to-earnings multiple of 34.3 times FY25 earnings.

Amber Enterprises is yet to announce the date to report its financial results for the fiscal third quarter. 

What does Amber do?

Amber Enterprises India is an integrated and comprehensive solution provider for the heating, ventilation, air conditioning (HVAC) industry in India, with 27 manufacturing facilities across the country focusing on different segments.

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