Amber Enterprises India Ltd (NSE:AMBER) Q3 2025 Earnings Call Highlights: Record Revenue and ...

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Sat, Jan 25, 2025, 12:00 AM 4 min read

Revenue: INR2,133 crores, 65% growth year-on-year.
Operating EBITDA: INR162 crores, 97% growth year-on-year.
PAT (Profit After Tax): INR37 crores, compared to a loss of INR1 crore in the previous year.
Consumer Durable Division Revenue: INR1,555 crores, 67% growth year-on-year.
Consumer Durable Division EBITDA: INR116 crores, 150% growth year-on-year.
Electronics Division Revenue: INR472 crores, 96% growth year-on-year.
Electronics Division EBITDA: INR34 crores, 193% growth year-on-year.
Railway Subsystem and Defense Division Revenue: INR106 crores, 13% decline year-on-year.
Railway Subsystem and Defense Division EBITDA: INR12 crores, impacted by slower uptake and expansion expenses.
9M FY25 Revenue: INR6,219 crores, 59% growth year-on-year.
9M FY25 Operating EBITDA: INR482 crores, 69% growth year-on-year.
9M FY25 PAT: INR133 crores, 228% growth year-on-year.
ROCE (Return on Capital Employed): Expected to cross 15% by year-end.

Warning! GuruFocus has detected 2 Warning Signs with NSE:AMBER.

Release Date: January 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Amber Enterprises India Ltd (NSE:AMBER) reported a robust quarterly performance with a 65% increase in revenue, reaching INR2,133 crores.
Operating EBITDA almost doubled, showing a 97% growth to INR162 crores, and PAT improved significantly to INR37 crores from a loss of INR1 crore in the previous year.
The Consumer Durable division saw a blended growth of 67%, driven by a 71% increase in the Room Air Conditioner (RAC) segment.
The Electronics division experienced remarkable growth, with revenue increasing by 96% to INR472 crores and EBITDA growing by 193% to INR34 crores.
Amber Enterprises India Ltd (NSE:AMBER) revised its revenue growth guidance for the Electronics division from 45% to 55% for FY25, indicating strong future prospects.

Negative Points

The Railway Subsystem and Defense division reported a muted quarter with a 13% decline in revenue due to delays in product offtake.
The profitability of the Railway Subsystem and Defense division was impacted by delays and expansion expenses, with expectations to normalize only by H2 of FY26.
Gross margins in the RAC segment declined by 106 basis points, attributed to product mix changes.
There are capacity constraints in the Electronics division, particularly in the Accent segment, which could impact short-term growth.
The company faces potential supply chain disruptions, particularly in the compressor segment, which could affect future production if not resolved.

Q & A Highlights

Q: Can you explain the decline in gross margins for the RAC segment and the growth in RAC components? A: The gross margin impact is largely due to the product mix, which varies from product to product. However, the components business, specifically RAC components, is picking up alongside the RAC segment, showing good growth in the current quarter and over the nine months.

Q: What factors led to the upward revision of guidance for the Electronics division from 45% to 55%? A: The Electronics division has expanded its applications beyond consumer durables to telecom, smart meters, and automotive sectors. This diversification, along with the growth potential in the SM circuit, has led to the revised guidance. We are confident in maintaining more than 55% growth in this vertical.

Q: How is the RAC segment performing, and what are the expectations for the upcoming season? A: The RAC segment grew by 71% due to converting gas charging customers to ODM solutions and the completion of new factories by brands. The industry is expected to grow by 25% this year, with anticipation of good summers leading to inventory ramp-up. We expect to grow in line with the industry, potentially outpacing it due to new customer additions.

Q: What is the status of the Railway Subsystem and Defense division, and when do you expect margins to normalize? A: The division faced delays due to structural changes in projects like the Gujarat Express and Mumbai Metro. These projects are now back on track, and we expect margins to return to the 18%-22% range by H2 of FY26, with growth resuming next year.

Q: Can you provide details on the JV with Korea Circuit and the expected CapEx? A: We are awaiting the finalization of the electronic component scheme by the government. The JV will focus on HBI, flex, and semiconductor substrates, with an expected CapEx of INR1,000 crores plus. We anticipate approvals by September next year, with significant incentives from both central and state governments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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