Goldman Sachs Says Amber Enterprises Has 35% Upside from Current Levels

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Goldman Sachs Says Amber Enterprises Has 35% Upside from Current Levels

By Aditya Raghunath -- Amber Enterprises India Ltd (NS: AMBE ) manufactures air conditioners (ACs). Just before the second wave of the pandemic, when the Indian economy had started opening up, and there were predictions of a hot summer, the outlook for the stock, and the industry, was very bright.

Sector analysts had expected AC sales to go up by 25% this summer. However, this summer was a complete washout. And hopes of those increasing numbers vanished.

Amber Enterprises’ stock price hit a peak of Rs 3,553 on March 8, just a week before the second wave hit. It has continuously fallen since then and closed June 23 at Rs 2,917.

Brokerage firm Goldman Sachs (NYSE: GS ) believes that the company can rebound and has given the stock a 12-month target of Rs 3,950, an upside of just over 35% from current levels.

“Driven by tailwinds from the above factors, we expect Amber to deliver 28% Ebitda growth over FY20-26 aided by the PLI scheme for AC components. Our 12-month DCF-based price target of Rs 3,950 implies the stock would likely trade at 30x/16x FY24/FY26 EPS,” analysts at the bank said.

Sachs called Amber, which has a 23% share in the Indian home AC market, a ‘specialist’ and said that it would be one of the biggest beneficiaries in the space.

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