At a Glance
Amber Enterprises just dropped its Q1 FY26 report, and investors are either doing backflips or nervously biting their nails. Revenue shot up 44% YoY to ₹3,449 Cr, while PAT climbed a cool 42% to ₹106 Cr. Market share? A juicy 29% in the RAC segment, making Amber the undisputed handyman of India’s AC industry. But before you turn your AC to chill mode, remember – this stock is trading at a P/E of 96. That’s not cooling; that’s boiling hot. The rally is powered by acquisitions and strong OEM demand, but with low dividend payouts and rising debt, this is one party where the drinks might run out fast.
1. Introduction
Amber Enterprises has become that overachieving student who tops exams yet refuses to share notes (read: dividends). With the Indian summer refusing to chill, RAC demand is hotter than a Delhi afternoon. Investors love it, analysts cheer it, and competitors watch with envy. But like all fast-growing teens, Amber is burning cash on expansions and acquisitions (hello, Unitronics deal).
The stock is at ₹7,804 – up 78% in one year. Wow, right? But a P/E of 96 means investors are paying today for profits that may show up in a parallel universe. So, while the topline is impressive, the balance sheet whispers caution.
2. Business Model (WTF Do They Even Do?)
Amber doesn’t sell ACs like Voltas; it makes them – and their parts – for everyone else. Think of it as the ghostwriter of the RAC world. OEMs love Amber because it does the dirty work:
- Complete RACs – Yes, they can manufacture entire air conditioners.
- Critical components – Heat exchangers, motors, PCBAs, fans, condensers – basically everything that keeps your room cool.
- Non-AC components – Because why not diversify when you already own the playground?
Its one-stop-shop model keeps clients sticky and competitors frosty.
3. Financials Overview
Here’s what the Q1 FY26 scoreboard says:
- Revenue: ₹3,449 Cr (+44%)
- EBITDA: ₹250 Cr (EBITDA margin ~7%)
- PAT: ₹106 Cr (+42%)
- EPS: ₹30.66
Annual trends scream growth: Sales grew from ₹6,729 Cr in FY24 to ₹9,973 Cr in FY25, and now TTM revenue is at ₹11,021 Cr. But net margins remain razor-thin at ~3%. High growth, low margins – classic OEM story.
4. Valuation
Is Amber fairly valued? Short answer: Nope. Let’s do the math:
- P/E method: EPS ₹81.3 (TTM) × sector multiple (40) → Fair Value ~₹3,250
- EV/EBITDA: EBITDA ₹793 Cr × 20 → EV ~₹15,860 Cr → Per share ~₹4,700
- DCF: Assuming 20% growth for 5 years, discounting at 12% → ~₹5,200
Fair Value Range: ₹4,000 – ₹5,200
Current price ₹7,804 = You’re paying luxury tax.
5. What’s Cooking – News, Triggers, Drama
- Unitronics acquisition: Expands into industrial automation.
- Electronics division: Key growth engine.
- Government push: PLI schemes and “Make in India” boost.
- Risks: Rising debt, dependence on a few OEM clients, margin pressure.
6. Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 6,240 | 6,590 | 8,426 |
| Liabilities | 2,876 | 2,987 | 4,082 |
| Net Worth | 1,909 | 2,065 | 2,286 |
| Borrowings | 1,455 | 1,539 | 2,059 |
Auditor’s Roast: Borrowings doubled, but management calls it “strategic”. Yeah, so was Titanic’s iceberg.
7. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 321 | 965 | 711 |
| Investing | -489 | -1,035 | -953 |
| Financing | 193 | -122 | 323 |
Commentary: Ops cash healthy, but investing cash is bleeding – acquisitions gulp cash like cola on a hot day.
8. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 11% | 9% | 11% |
| ROCE | 10% | 14% | 14% |
| P/E | 53 | 61 | 96 |
| PAT Margin | 2.4% | 2% | 3% |
| D/E | 0.8 | 0.9 | 1.0 |
Auditor’s Verdict: ROCE is okay, but that P/E? Needs therapy.
9. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 6,927 | 6,729 | 9,973 |
| EBITDA | 422 | 491 | 736 |
| PAT | 164 | 139 | 251 |
Commentary: Revenue running like Usain Bolt, margins jogging like your uncle on Sunday.
10. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Voltas | 15,413 | 823 | 53 |
| Blue Star | 11,968 | 585 | 61 |
| Amber | 11,021 | 282 | 96 |
| Crompton | 7,864 | 556 | 38 |
Commentary: Amber’s P/E is skydiving without a parachute.
11. Miscellaneous – Shareholding, Promoters
- Promoters: 39.65%
- FIIs: 28.6%
- DIIs: 17.8%
- Public: 13.9%
Promoters holding steady, FIIs love it, DIIs nibbling, public waiting for correction.
12. EduInvesting Verdict™
Amber Enterprises is the OEM king of the RAC world – growing fast, expanding aggressively, and catching every tailwind in the industry. But it’s also burning cash, levering up, and trading at a P/E that would make even Tesla blush.
SWOT Quickie:
- Strengths: Market leader, strong client base, one-stop model.
- Weaknesses: Low margins, high P/E, rising debt.
- Opportunities: PLI schemes, Unitronics expansion.
- Threats: Competition, input cost volatility, demand cycles.
This is a classic high-growth, high-risk play. Investors should buckle up – because when you’re priced for perfection, even small hiccups can cause frostbite.
Written by EduInvesting Team | 29 July 2025
SEO Tags: Amber Enterprises, Air Conditioner OEM, Q1 FY26 Results, Stock Analysis
