MENU

Published on 7/11/2018 8:53:22 AM | Source: Angel Broking Pvt Ltd

Buy Amber Enterprises India Ltd For Target Rs.1135.00 - Angel Broking

For Q2FY2019, Amber Enterprises (Amber) posted a 15% yoy fall in sales volumes owing to unseasonal rains in April & May which resulted in inventory build up across brands. The company is expecting a recovery in demand in H2 and has maintained the guidance of 2.1 mn volume sales in FY2019, a 10% yoy growth.

 

Fall in revenue:

Its Q2’s standalone top-line fell by 15% yoy led by fall in ACs volume. Its subsidiaries/recent acquisitions namely – Ever Electronics, IL JIN and PICL reported a total sales of `175cr with an OPM of ~4%+ up from previous level of ~3.5%. Amber is expecting lot of synergies from its recent acquisitions in near future which would drive future growth.

 

Margins were under pressure:.

Q2 is a low base quarter, hence fall in revenue drove down the company’s profitability. The company has guided for margin improvement in H2 on the back of improving product mix towards high-margin components segment. Low volume turned into a loss of `1.7 cr for the quarter.

 

Outlook and Valuation:

We have largely maintained our earnings estimates in view of expected recovery in AC demand in subsequent quarters and synergies benefits from its new acquisitions. We expect Amber to report a CAGR of ~27%/50% in consolidated revenue/earnings over FY18-20E. The recent correction provides a good entry point for long term investors. We maintain BUY with a target price of `1135 (25x FY2020E EPS). 

 

To Read Complete Report & Disclaimer Click Here

 

Click here to open demat account    

 

For More Angel Broking Pvt Ltd Disclaimer http://www.angelsecurities.in/disclaimer.aspx           

 

Above views are of the author and not of the website kindly read disclaimer