Fundamental Analysis of Pumpkin Enterprises

Fundamental Analysis of Pumpkin Enterprises: As temperatures rise due to global warming, the need for air conditioners is increasing day by day. Some people say that while air conditioning was traditionally considered a luxury, that is no longer the case. One of the companies engaged in manufacturing air conditioners is Amber Enterprise.

In this article, we will perform a fundamental analysis of Amber Enterprises and look at the company’s future potential.

Fundamental Analysis of Amber Enterprises – Company Overview

Amber EnterpriseEstablished in 1990, Amber Enterprises India Limited is a backward integrated market leader in the Indian Room Air Conditioning (RAC) industry. We have a strong presence in both the component and finished product markets of the HVAC industry.

Amber offers a diverse product portfolio covering indoor and outdoor units, indoor ACs including window ACs, as well as reliable critical components and mobility applications tailored to the railway, metro, bus and defense sectors. The company also expands its expertise in commercial air conditioning (CAC) to meet higher tonnage AC requirements.

Leveraging extensive backward integration and strong R&D capabilities, Amber has captured a significant share of the Original Design Manufacturing (ODM) segment. What started as a single plant in Rajpura, Punjab in 1994 has since grown into a network of 27 strategically located manufacturing facilities at nine locations in India, each featuring a high level of downstream integration.

Among our customers, notable brands include HITACHI, Daikin, LG, Blue Star and Godrej. Here in the fundamental analysis of Amber Enterprises, we can get a basic idea about the company and what they do.

Amber Enterprises also boasts of various subsidiaries including Sidwal Refrigeration Industries Private Limited, PICL (India) Private Limited, IL JIN Electronics (India) Private Limited, EVER Electronics Private Limited, AmberPR Technoplast India Private Limited and Pravartaka Tooling Services Private Limited. .

segment analysis

Room air conditioning: We are the market leader in HVAC providing integrated and comprehensive solutions.

Components (RAC and non-RAC): We are a market leader in providing functional components for the air-conditioning and non-air-conditioning sectors.

Mobility applications: We offer a wide range of products for mobility applications. Strong R&D capabilities serving the Indian Railways, Metro, Defence, Bus and Telecom sectors in India.

motor: It has strong manufacturing capabilities, offering over 200 models and servicing some of the leading key customers across domestic and export markets.

Electronic products: We provide solutions to the home appliances and appliances sector. Smart wearable and hearable device manufacturers are on the horizon.

Industry Overview

The Indian economy has experienced remarkable growth in recent years, with GDP jumping from $1 trillion to $3.1 trillion in just 10 years. According to the Economic Survey, real GDP growth is expected to reach 6.5% in FY24. India will still be one of the fastest growing economies in the world, albeit below FY23.

The electronics industry is expected to be a key driver of economic development and presents lucrative opportunities for Amber. The Indian air conditioner market has significant growth potential. The market valuation was USD 3.2 billion in fiscal 2022-23 and is expected to reach USD 10 billion by 2028.

According to several reports, the HVAC industry is expected to register a CAGR of 10-12% from FY 2022-23 to FY 2027-28. India’s indoor air conditioning (RAC) penetration remains low at 12-14% compared to much higher levels in other countries. This highlights the vast untapped market potential for RAC in India and represents promising prospects for Amber’s future growth and expansion.

The total addressable EMS market in India was valued at Rs 3,372 billion in FY22 and is expected to grow to Rs 7,504 billion in FY26 at a CAGR of 22%. However, the contribution of Indian EMS companies is approximately 44%, valued at Rs 1,469 trillion in FY22, and is expected to grow at a CAGR of 32% to reach Rs 4,502 billion by FY26.

The total addressable EMS market in India was valued at Rs 3,372 billion in FY22 and is expected to grow to Rs 7,504 billion in FY26 at a CAGR of 22%. However, the contribution of Indian EMS companies is approximately 44%, valued at Rs 1,469 trillion in FY22, and is expected to grow at a CAGR of 32% to reach Rs 4,502 billion by FY26.

Fundamental analysis of Amber Enterprises will help you find the sector and industry perspectives you need to deeply understand the company.

Amber Company Fundamental Analysis – Finance

Sales and Net Profit

Amber Enterprise It reported a profit of Rs. 69.27 crore in FY23 compared to Rs 420.6 billion in FY22, an increase of about 65%. Profitability increased to 500 billion won. 164 crore in FY23 from Rs. It increased by approximately 48% to 11.1 billion won. Timely investments in required capex have led to significant increases in revenue and profits, which have helped increase profitability and increase share of RAC Manufacturing and other segments.

The picture below is revenue and profit This is the performance of Amber Enterprises over the last five financial years.

profit

The financial firm reported an operating profit margin of 4.78% and net profit margin of 2.36% in FY23, compared to an operating profit margin of 4.77% and 2.64% in FY22. From a 5-year perspective, the operating profit margin is 5.31% and the net profit margin is 3.06%.

Operating profit margins have been somewhat stable over the past few years. Net profit margins declined, but were in a similar range over the long term.

The picture below is profit Here is the performance of Amber Enterprises over the last five financial years.

rate of return

Return on capital employed increased 4% from 11% in FY22 to 15% in FY23, but RoCE was in a similar range when considering the five-year trend. The five-year average ROCE is 13.7%.

Return on equity was reported to have increased by 2.2% from 6.6% in FY22 to 8.8% in FY23. Considering the long-term perspective, RoE decreased by 1.2%. The 5-year average RoE is 9.28%.

The picture below is return Return on equity and capital employed by Amber Enterprises over the last five financial years.

leverage ratio

If you look at Amber Enterprises’ leverage, you can see that D/E is increasing, but the debt level is maintained at a relatively low level of less than 2 times. This indicates less financial strain on the company as it relies less on borrowed capital to finance its operations and expansion.

This also means Amber Enterprise can keep more of its profits because it has less commitments to repay debt and interest. On the interest front, the company’s FY23 interest coverage ratio was reported at 4.21. This means the company generated enough gross profits to cover its interest expenses by more than four times.

The picture below is Debt capital and ICR Here is the performance of Amber Enterprises over the last five financial years.

Amber Corporate Fundamental Analysis – Key Indicators

Amber Enterprises Fundamental Analysis – Future Plans

• The company expects ROCE to improve significantly from current levels and is expected to be between 19% and 21% in the next two to three years.
• Our main goal is to be the best OEM/ODM parts manufacturing company and our customers’ first choice.
• Amber aims to strengthen its position as a component manufacturer in the Indian RAC market as well as in the B2B segment.
• AEIL also aims to ensure that all devices within the group will soon be powered by renewable energy sources.

conclusion

Concluding the article on fundamental analysis Amber Enterprise, we understood their business, finances and future prospects. Prior to investment, additional analysis is required to determine the nature and suitability of risk and return. Please leave a comment with your thoughts in the section below.

Written by Ashish Agarwal

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