AMBER - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.5

📊 Fundamental Analysis Summary

Amber Enterprises (AMBER) is a leading player in the contract manufacturing space for consumer durables, especially air conditioners. While the company has strong revenue visibility and sector tailwinds, its high valuation, moderate capital efficiency, and elevated debt levels make it a cautious long-term bet. The recent price surge and RSI suggest short-term overheating, so timing matters.

Metric Value Interpretation

P/E Ratio 96.2 Extremely high — priced for aggressive growth

PEG Ratio 3.19 Overvalued relative to growth — caution warranted

ROE / ROCE 11.3% / 14.5% Moderate — not ideal for long-term compounding

Dividend Yield 0.00% No dividends — purely growth-focused

Debt-to-Equity 0.90 High — financial risk elevated

EPS ₹81.3 Decent earnings — but not enough to justify current valuation

PAT Growth (QoQ) -10.3% Decline — earnings momentum slowing

Book Value ₹676 Price-to-book ~11.5× — very expensive

RSI / MACD 64.7 / +164 RSI nearing overbought; MACD strong — short-term bullish but overheated

DMA 50 / 200 ₹7,073 / ₹6,327 Price well above both — momentum-driven

52W Price Range ₹3,964 – ₹8,177 Near 52-week high — not ideal for fresh entry

FII/DII Change +1.54% / -1.60% FII buying — positive; DII selling — mixed sentiment

📉 Ideal Entry Price Zone

Entry Zone: ₹6,800 – ₹7,200

Near 50-DMA and below RSI 60 — better risk-reward.

Avoid entry above ₹7,800 unless PEG improves and earnings accelerate.

🧭 Exit Strategy & Holding Period

Holding Period

2–3 years, with regular monitoring of debt levels and earnings growth.

Exit Strategy

Consider partial exit if PEG remains above 3.0 and ROE stagnates below 12%.

Reassess if price exceeds ₹8,500 without corresponding EPS or PAT growth.

Key Metrics to Monitor

ROCE improving to 18%+

Debt-to-equity trending below 0.6

PEG ratio falling below 2.0

PAT growth > 15% YoY

🧠 Final Thoughts

Amber Enterprises is a growth story with execution risk. While its sector positioning is strong, the valuation and debt levels demand caution. It’s best suited for investors with moderate risk appetite and a keen eye on quarterly performance.

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