Goldman Sachs downgrades Amber Enterprises after 107% YTD rally

Goldman Sachs has downgraded Amber Enterprises India to Neutral from Buy after a sharp rally in the stock price, while simultaneously increasing its target price to Rs 6,300 from Rs 4,550. On November 27, Amber’s shares closed at Rs 6,469, leaving limited upside potential relative to the revised target.

Stock performance outpaces Nifty 50
Amber Enterprises has delivered a stellar 107 per cent year-to-date (YTD) gain in 2024, significantly outperforming the Nifty 50, which has risen by twelve per cent in the same period. October alone saw the stock climb twenty-five per cent, with November adding 7 per cent so far.

Market leadership and client base
Established in 1956, Amber holds a commanding twenty-nine percent share in India’s Room Air Conditioner market. Its robust clientele includes industry giants such as LG, Hitachi, Mahindra, Daikin, and Blue Star, serving over twenty Original Equipment Manufacturers (OEMs) and Original Design Manufacturers (ODMs).

Q2FY25 results showcase growth
Amber Enterprises reported a consolidated net profit of Rs 19.2 crore for Q2FY25, a significant turnaround from a Rs 7 crore loss in the corresponding period of the previous year. Revenue rose 78 per cent year-on-year to Rs 1,684.7 crore.

Strategic growth initiatives
The company’s focus on reducing seasonality dependence through diversification into electronics and innovative air-conditioning products has driven market confidence. Notable Q1FY25 launches include tower ACs, window top-throw inverter series, and high-efficiency tropical split ACs. In the electronics segment, Amber introduced bare Printed Circuit Boards (PCBs).

Outlook remains positive but cautious
Goldman Sachs acknowledged Amber’s position as a key player in India’s air-conditioning and electronics sectors. The brokerage highlighted the company’s reduced seasonality dependence and emerging growth drivers but noted that the stock’s rally already factors in its recent achievements.

Amber Enterprises remains under investor focus as it navigates its next phase of growth.