My Investment Idea No. 8: Amber Enterprises India Limited

Long Term Investment Idea No. 8

Amber Enterprises India Limited

1.    Face Value  = Rs 10

2.    Equity         = 31.45 Cr  

3.    Price           = Rs 1140

4.    MarketCap  = Rs 3591 Cr (Small Cap)

5.   Amber Enterprise India Limited is a prominent solution provider for Air Conditioner OEM/ODM Industry in India, a one-stop shop for air conditioners and its components for consumers. It has 10 manufacturing facilities across India, mostly in Northern part as of now. The factories are located in Kala Amb, Rajpur, Dehradun, Jajjar, Greater Noida, Faridabad and Pune. Amber Enterprise is strongly positioned with its backward integration to drive the core deliverables in terms of quality, cost and delivery. Company has diversified portfolio which includes:-

    (a)    Design and Manufacturing of Window Air Conditioners, Indoor & 

    Outdoor Units of Split ACs and Inverter Split ACs with specifications 

    ranging from 0.75 to 2 Tons across energy ratings.

    (b)   Company also manufactures components for other durables and 

    automobiles such as case liners for refrigerator, plastic extrusion 

   sheets, sheet metal components for Microwave, Washing machine tub 

    assemblies etc.

6.   Following is the list of Customers of the Company:-

      (a)   LG

      (b)   Carrier

      (c)   John Deere

      (d)   SML Isuzu

      (e)   Daikin

      (f)    Mahindra

      (g)   Blue Star

      (h)   Godrej

      (i)    Hitachi

      

Results Overview

       Net Sales (NS)/ Net Profit (NP)/ Earning Per Share (EPS)

Yearly

7.    2015:  Rs 1230.27 Cr/ Rs 28.77 Cr/ Rs 9.15  

8.    2016:  Rs 1089.03 Cr/ Rs 24.10 Cr/ Rs 7.66

       Yearly YoY De-Growth in NP = 16.23%

9.    2017:  Rs 1644.40 Cr/ Rs 27.90 Cr/ Rs 8.87

       Yearly YoY Growth in NP = 15.76%

10.  2018:  Rs 2128.08 Cr/ Rs 62.31 Cr/ Rs 19.81

       Yearly YoY Growth in NP = 123.33%

11.  2019:  Rs 2751.99 Cr/ Rs 93.66 Cr/ Rs 29.78

       Yearly YoY Growth in NP = 50.31%

Half Yearly

12.   HY FY 2019: Rs   828.36 Cr/ Rs 27.12 Cr/ Rs 8.62

13.   HY FY 2020: Rs 1389.07 Cr/ Rs 53.17 Cr/ Rs 16.91

        HY YoY Growth in NP = 96.05%

Shareholding Pattern

14.   Promoters:                    44.02%

15.   FII/FPI:                         11.41%

16.   Financial Institutions:    00.04%

17.   Mutual Funds:               05.69%

18.   DII:                               29.83%

19:   Others:                         09.02%

Investment Rationale

20.   Its also a consumption driven story and in spite of the fact that there has been subdued demand since Beginning of 2019, this company was able to clock 50% plus YoY growth in FY 2019 and has clocked nealy 100% growth (96.05%) in First Half of FY 2020 as compared to First Half of FY 2019. If the company has given such a solid performance when other companies were struggling to keep themselves in Profit, imagine the growth which it could demonstrate during good times. Company is nearly debt free with cash in hand and promoter has not pledged its shares. 

21.   In addition, its business model is such that even if one odd brand doesn't grow due to any reason, other brands sale automatically rises, after all consumers would buy what they want. Business model is not only safe, it is also an easily scalable model, wherein new Brands can associate with them in future or they can set up additional manufacturing units or they can add new vertical on the lines of Air Conditioner Vertical, like Dixon Technology is having.

22.   Amber Enterprise was listed on stock exchanges in January 2018 at Rs 1180. In February 2018 it touched a high of Rs 1380 and after that it was in downtrend for next 12 months and in February 2019, it touched a low of Rs 625. Presently it is trading at Rs 1145 and I think its a good buy on every dip. I may add this stock for long term on every dip and am hopeful that would be able to add between the price value of Rs 1050 - 1200.

Disclaimer

23.  The information provided above has been taken from the internet, which may or may not be correct. Therefore, do your own research before investing.

24.   The post written above is not to be taken as a "Buy Recommendation" from the author on Amber Enterprise and no one should taken decision to invest in Amber Enterprise India Limited based on the information given in this Blog. The blog is written only to express the views of the author, which may be right or wrong. You must consult your financial adviser before investing in Amber Enterprise India Limited.