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For 3QFY2019, Amber Enterprises Ltd (Amber) posted a decent set of numbers given muted demand environment and significant cost pressures. Revenue grew by 14.9% yoy to `338.8cr. On the bottom-line front, Amber reported PAT of `3.9cr against `0.1cr despite cost pressures.
Growth led by AC Components Division:
The company’s top-line grew by 14.9% yoy to `338.8cr on the back of strong volume growth. Growth was led by strong performance of the AC Components division which accounted for 8.8% of revenues in Q4FY19 as compared to 5.9% of revenues in Q3FY18. Growth in the air conditioner segment was sluggish due to weakness in overall demand and therefore its contribution dropped to 78.4% of revenues from 80.9%. Non AC components contributed to 12.8% of revenues as compared to 13.2% of revenues in Q3FY18.
Margins Impacted Due to Cost Pressures:
On the operating front, the company’s gross margins declined by 160bps to 14.1% due to cost pressures. EBITDA margins also declined by 130bps yoy to 5.7%. However lower interest outgo an stable tax rates led to increase in PAT from Rs. 0.1cr to Rs. 3.9cr.
Outlook and Valuation:
We expect Amber Ltd. to report net profit (reported) CAGR of ~35.5% to ~`114.4cr over FY2018-20E on the back of topline growth of 19.4% in the same period. Post the 3QFY19 numbers, we maintain BUY on the stock with a revised target Price of `910 (25xFY20E)
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