AMBERNSEJanuary 24, 2025

Amber Enterprises India Limited

8,394words
99turns
16analyst exchanges
6executives
Management on call
Jasbir Singh
EXECUTIVE CHAIRMAN, CHIEF
Daljit Singh
MANAGING DIRECTOR - AMBER ENTERPRISES INDIA LIMITED
Sudhir Goyal
GROUP CHIEF FINANCIAL OFFICER
Sanjay Arora
CHIEF EXECUTIVE OFFICER,
Ravi Kharbanda
HEAD INVESTOR RELATIONS - AMBER ENTERPRISES INDIA LIMITED
Rohit Singh
HEAD OF CORPORATE AFFAIRS - AMBER ENTERPRISES INDIA LIMITED
Key numbers — 40 extracted
Rs. 2,133 crore
he same. I am pleased to report robust quarterly performance in Quarter 3 FY '25, with revenue of Rs. 2,133 crores, registering growth of 65%. Operating EBITDA almost doubled to Rs 162 crores, recording 97% grow
65%
uarterly performance in Quarter 3 FY '25, with revenue of Rs. 2,133 crores, registering growth of 65%. Operating EBITDA almost doubled to Rs 162 crores, recording 97% growth. And PAT grew to Rs. 37 c
Rs 162 crore
, with revenue of Rs. 2,133 crores, registering growth of 65%. Operating EBITDA almost doubled to Rs 162 crores, recording 97% growth. And PAT grew to Rs. 37 crores from a loss of minus Rs. 1crore over the
97%
crores, registering growth of 65%. Operating EBITDA almost doubled to Rs 162 crores, recording 97% growth. And PAT grew to Rs. 37 crores from a loss of minus Rs. 1crore over the corresponding peri
Rs. 37 crore
h of 65%. Operating EBITDA almost doubled to Rs 162 crores, recording 97% growth. And PAT grew to Rs. 37 crores from a loss of minus Rs. 1crore over the corresponding period previous year. As you are aware,
Rs. 1crore
oubled to Rs 162 crores, recording 97% growth. And PAT grew to Rs. 37 crores from a loss of minus Rs. 1crore over the corresponding period previous year. As you are aware, we have three business divisions
67%
arter 3 in anticipation of the positive summer season. We recorded the blended division growth of 67%, led by both RAC and non-RAC vertical. RAC grew by 71% and non-RAC vertical grew by 43%. And the
71%
recorded the blended division growth of 67%, led by both RAC and non-RAC vertical. RAC grew by 71% and non-RAC vertical grew by 43%. And the resultant EBITDA of Rs. 116 crores, reflecting growth o
43%
growth of 67%, led by both RAC and non-RAC vertical. RAC grew by 71% and non-RAC vertical grew by 43%. And the resultant EBITDA of Rs. 116 crores, reflecting growth of 150% over last year. The strong
Rs. 116 crore
d non-RAC vertical. RAC grew by 71% and non-RAC vertical grew by 43%. And the resultant EBITDA of Rs. 116 crores, reflecting growth of 150% over last year. The strong performance is driven by the underlying
150%
nd non-RAC vertical grew by 43%. And the resultant EBITDA of Rs. 116 crores, reflecting growth of 150% over last year. The strong performance is driven by the underlying growth in the RAC industry, co
Rs. 472 crore
Electronics division, the division continued the remarkable growth momentum, clocking revenue of Rs. 472 crores, reflecting growth of 96%. And resultant EBITDA of Rs. 34 crores reflecting 193% growth. Looking
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Guidance — 20 items
Let me take you through the divisional performance
opening
“And we expect to commence the mass production from the new plant by H1 of the next financial year.”
Let me take you through the divisional performance
opening
“Looking into current order book, we are pleased to revise our revenue growth guidance for Electronics division from 45% earlier to 55% for FY' 25, propelled by both PCBA and bare board verticals.”
Let me take you through the divisional performance
opening
“On the strategic expansion front, the construction is progressing well for the new facility at Hosur and we expect to start commercial production by Q4 of FY '26.”
Let me take you through the divisional performance
opening
“We expect to get back to normalized range of 18% to 22% by H2 of FY '26, to emphasize delays in offtake are momentary with no cancellations of orders.”
Let me take you through the divisional performance
opening
“During the quarter, we further strengthened the order book with an additional air conditioner order for a metro project.”
Let me take you through the divisional performance
opening
“We expect the facility to be ready by Quarter 1 of FY '26, product trials to begin from quarter 2 or Quarter3 FY '26 onwards for the Driving gear, Coupler and Pantograph.”
Let me take you through the divisional performance
opening
“We continue to remain confident on the long-term potential of division and maintain our guidance of doubling the revenue in the next three years, backed by a strong order book visibility of Rs.”
Coming to Electronics Division performance
opening
“I will reiterate that we are progressing well and expect to close the year with revenue growth in excess of 55% for Financial Year ‘25.”
Coming to Electronics Division performance
opening
“There is revision in guidance, earlier was 45%, now we are going by more than 55% during the year.”
Coming to Electronics Division performance
opening
“On the return on capital employed, with a strong underlying business performance, we expect improvement in ROCE and expect to cross the 15% mark by the year end.”
Risks & concerns — 13 flagged
Now coming to our third division, Railway Sub-system & Defense: The division reported a muted quarter with a decline of 13% in Quarter 3 on expected lines, owing to delay in off-take of products.
— Let me take you through the divisional performance
Please note, operating EBITDA is before impact of ESOP expenses and other non-operating income and expenses.
— Sudhir Goyal
106 crores, reflecting a decline of 13% year-on-year.
— Coming to Electronics Division performance
So, it's very difficult to give you the complete breakup that how to measure it, but it's a normalized thing and there's no big impact in the gross margins during the financial year.
— Sudhir Goyal
Now, given in the short term we have capacity constraints for Ascent, also there has been ASP decline in hearables and wearables.
— Natasha Jain
And coming into the next season, given the overall slowdown in consumption and the base of last year being very high, how are you looking at the upcoming season really?
— Bhoomika Nair
But you are right that there is some demand slowdown.
— Jasbir Singh
Because this year we will probably see some decline in revenues and drop in margins.
— Bhoomika Nair
And on the other side the slowdown happened, the delays happened, which was totally not foreseen.
— Jasbir Singh
As on the percentage side, I think it is very difficult to say because largely customers have got added on the CAC front also, the commercial air conditioners front also.
— Jasbir Singh
Well, see, outsourcing industry, it's very difficult to predict at our level because we are a B2B solution provider.
— Jasbir Singh
And to add on the capacities on assembly lines is not a very big challenge because it's just a six-month job.
— Jasbir Singh
So, the next quarter and next to next quarter will be impacted because of the slowdown, but then we are coming back again.
— Jasbir Singh
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Q&A — 16 exchanges
Q
Congratulations team for a great set of numbers. Sir, I had two questions, my first question is on the RAC side. So, now in the past few quarters we did more of assembly because of which our margins were flattish. Now when I see your consolidated gross margin, you further declined by 106 basis points. So, I just want to know if you could throw some light as to how RAC components did versus RAC assembly, and some growth in between those two segments?
Sudhir Goyal
So, the gross margin impact is largely due to the product mix, like we need to give you a very detailed explanation for that because margins varies on product to product. Like we explained earlier, there are different margins for different star rating, different tonnages, plus which component revenue share is how much. So, it's very difficult to give you the complete breakup that how to measure it, but it's a normalized thing and there's no big impact in the gross margins during the financial year. Sir, so can we expect that the components business is picking up, specifically the RAC component
Q
Congratulations on a great set of numbers. Sir, just wanted to understand the RAC segment a little better. Now if I look at it, for the nine-month period we have grown fairly well, even this quarter we have grown about 71%. Now, if I understand, a lot of the brands were putting up a lot of capacities in a lean season too they have continued to outsourced. So, if you can just explain what's driving this growth, what's the end market growth? And coming into the next season, given the overall slowdown in consumption and the base of last year being very high, how are you looking at the upcoming se
Jasbir Singh
Good morning, Bhoomika. First of all, I will give you the reason for 71% growth of this vertical. You would be aware that we were doing gas charging for large multinational companies, and we have been telling that we are converting those into ODM players and that has already happened. And that's the reason of the growth. And also, the factories which brands were putting, it has already done. So, there is no more new factory which is getting announced as of now. All the six brands who were putting up, their factories are up and running. There is no brand which is left out now. And from our pers
Q
Just wanted to understand these new customers that have been moved from gas charging to ODM solutions. How large could those customers be and how much they may have contributed in third quarter and nine-month of this fiscal?
Jasbir Singh
Well, these are large multinational companies which were earlier importing their products and then the gas ban was announced by Government of India, so we started helping them by gas charging the products. But ultimately, the road map was very clear that you cannot continue like this, you have to either put up your own facility or you convert it into manufacturing in India. And there their volumes are growing, I think they are gaining traction, they have surpassed our expectations. We thought that they will grow in range of 25%, 30% but two of our customers, they have grown by more than 45%. S
Q
Sir, congrats for excellent set of numbers. So, currently, the industry capacity, I mean, how do you see the current industry capacity of the brands as well as the EMS players both put together? And how do you see the capacity changing by FY'26 end and by FY'27 end? I guess most of the projects are already in place now, so what should be the capacity change maximum?
Jasbir Singh
See, everybody has put up different capacities. All the brands, all the six new units which had come are at very, very different capacities. Some have put up 0.5 million capacity, some have started the 2 million capacity. But whenever a brand puts up a facility, they will think long term. So, they have thought about the next four, five years at least to put up these facilities. And to add on the capacities on assembly lines is not a very big challenge because it's just a six-month job. So, you can you can add assembly businesses anytime, while moving in the season also. I believe that overall,
Q
Just one question on this proposed JV with Korea Circuit on the manufacturing of PCBs. If you could just help us, what is the overall Capex that you are looking at here? What could be the asset turns? I understand we are expecting quite a bit of subsidy as well here, so yes, some dot contours, by when do you commission this plan?
Jasbir Singh
Good morning, Ankur. So, on Korea Circuit we are waiting for Government to finalize the incentive scheme. You would have all heard through the media reports that it has already got nod from the Finance Ministry. So, earlier we were talking of Rs. 40,000 cores incentive, but the nod which has come from the Finance Ministry is Rs. 25,000 crores. We are waiting for the structure. We are not privy to the final structure, which is going to come out, especially for the PCB parts. And once that is there, earlier we were hearing it is Rs. 1,000 cores minimum investment, but now we do not know because
Q
First question that I had was on the Consumer Durable side. So, if you could just tell us what's the peak capacity and the peak revenue that you can do with the current capacity? The reason why I am asking this question is that the government recently announced the third round of home appliances PLI and Amber did not participate in that. So, just your thoughts there, that's my first question.
Jasbir Singh
Well, we have already got approval of Rs. 400 crores PLI, and that's the reason why we did not apply for any further PLIs. And the earlier PLIs are moving very fine, we are getting reimbursement from government in time, and we are very thankful to Indian Government for all those reimbursements which are happening on time. On the capacity utilization, to answer your question, I already addressed this question earlier, but I will reiterate. We are currently at 65% level, and you can calculate where we can go with the complete 95% or 98% capacity utilization if that goes fine. And sir, the second
Q
Sir, my questions are related to this JV where Ankur also asked you on the expected turnover or the asset turnover that you can expect from this particular facility. So, basically, if you take this assumption that the incentives are provided and Amber invests into this particular facility, over a longer term, three to four year or a five-year term period, where do we see the scale up which can happen in this particular subsidiary of IL JIN and Korea Circuit? And my second question is on the margins of Railways segment. Like you mentioned that margins can come back to the normal 19%, 20% which
Jasbir Singh
So, on the first question, the asset turns normally in the PCBs are similar to OSAT businesses. It is in the range of 1x to 1.25x. However, how we should look at it is, since government is giving incentives, almost 70% to 75% will be given back collectively by MeitY as well as the state governments. So, the asset turns from that perspective is much better, it goes to about 2.5x or 3x. And also to answer your second question on the Railways front, yes, we expect the margins to come back from H2 onwards of next financial year. So, the next quarter and next to next quarter will be impacted becaus
Q
Congratulations for great earnings. Sir, if you could give a sense, I know it's kind of a repeated question, but for nine-months what would have been the industry growth in your estimate? I mean, you have said about 25% growth for the full year, does that mean that fourth quarter the underlying assumption is actually a lower number?
Jasbir Singh
Well, I think what we hear from different brands, everybody has grown differently. Most of them are reporting 30%-35% growth and some have reported 20% also. But on the industry side, I think the first nine-months should be somewhere about 30% growth kind of a thing, what we hear from everybody. Quarter four, of course, because it's already a large quarter last year, so percentage wise there, I don't think so that we should look at 30% or 35%. And that's the reason why I said that industry should be in the range of 25% by year end. Understood. And the second question sir, with respect to the E
Q
Congratulations on a great set of results. Sir, my first question is on Ascent circuit, just wanted to check, like what is the revenue breakup for this quarter and the profitability as well? And one question from the accounting perspective, why are we not seeing any flow through in minority interest from the Ascent circuit? I mean, our minority interest has almost been flat in the last three, four quarters while the Ascent circuit revenue should start flowing in too, right? Or am I missing anything here?
Jasbir Singh
Well, Ascent Circuits has done Rs. 82 crores in Quarter 3. And we expect Ascent Circuits to get to grow in range of 20% to 25% range. And we have onboarded five new customers recently. So, whenever the new customer gets added, the share of business is very skewed initially for the first year and then it ramps up. We are already getting very good traction in Ascent Circuits on the single multi-layer PCB business, primarily because of the anti-dumping duty imposed. And we expect that in the next two years Ascent Circuits will be doubling its revenue from where it is today. There's a lot of poten
Q
I just wanted to check, we have seen a lot of interested other peers as well as companies potentially putting up compressor plants due to maybe restrictions of imports coming through. Our thought as to why we are not considering that given the sort of strong growth? So, just your views on that, sir?
Jasbir Singh
We are already in touch with our suppliers for the capacity ramp up, and most of the suppliers are indicating a lot of capacity being ramped up at their level. But however, in case we see that there is a shortage coming in, we will certainly plan. Sure, sir. And maybe just wanted to understand what is the inventory level currently in channel given the summer, as such the previous summer was very strong with virtually stock outs, and after now two quarters we are seeing volume coming up. So, in terms of overall inventory level, is it at normalized levels? Do you see this growth momentum continu
Q
Congratulations on great scale up across business. Sir, I just have one question. On a three-to-four- year basis, very clearly the Electronics division will lead the growth even in profitability and Consumer is anyway going to be a steady state. But in the Electronics division, so across the two, three divisions, can you help us understand how will we strategize the export opportunity? And once the new facility by Q4 '26 starts and stabilizes in '27, '28, should we expect a significant export scale-up? Or that's going to cater to maybe 80%, 90% India only?
Jasbir Singh
Well, right now, Amit, it is 90% India, and very small exports which are happening. But yes, as the ramp up is happening, the teams are already in touch for a lot of exports, not only for PCBs, but PCBAs also. I believe for cracking the customer outside India it takes a little time and gradually share of business grows. So, to answer your question on the three to four-year trajectory, yes, we see a significant scaling up of exports happening from both Ascent Circuits as well as IL JIN. Sure. And a quick one on Capex and the cash flows. How should we think about maybe around next year or what k
Q
Sir, I have just one question. If you look at, there are some uncertainties around the supply chain, earlier it was on the group proper, now currently there are some uncertainties on the compressor side as well for the upcoming season. How do you see industry and reversal placed in terms of inventories and product? Can we expect some disruption if industry growth at around 15% or more than that?
Jasbir Singh
So, on the compressor supply chain issue, so copper supply chain issue has been resolved by the Government, they have already moved out the inner grooved tube from the category and the BIS has also been revised for one of the companies. And plus, we are very thankful to all the copper manufacturing companies who have put up the facilities for building up plain copper tube facilities. I think copper more or less is resolved. As far as the compressor is concerned, I think February and March is good to go for everybody. But yes, April sounds a little tricky because the shipments, there is a delay
Q
Sir, would it be possible to comment broadly how much price increases are required in your AC business to compensate for the recent commodity increases and currency depreciations?
Jasbir Singh
Well, there's a little uptake on the gas refrigerant prices which has impacted in the range of Rs. 100 to Rs. 120 per air conditioner. Other than that, it's a pass-on strategy from our side. So, whenever any kind of currency or commodity is hit, we have demonstrated in past that we pass on to our customers at a quarterly lag basis. So, our is a B2B business, we operate on price variation clauses with our customers. So, not much of inflation on the other component because of copper, apart from gas? Not really, copper is in the same range currently operating.
Q
Sir, quickly on the Korea Circuits JV. I mean, if you look at Korea Circuits, they are also into manufacturing of semiconductor substrates. You are starting with bare board manufacturing, what's the timeline you are looking at when you transition from bare board manufacturing to semiconductor substrate manufacturing?
Jasbir Singh
So, JV is basically for HDI, flex and semiconductor substrates. We will be beginning with HDI as a first phase, and then move to semiconductor substrate, because we think that FY'27-'28 will be the year when India's semiconductor ecosystem will get built up. Before that we are planning for HDI. And sir secondly, I mean, obviously, this whole Capex which you are going to do with Korea Circuits, it's going to be heavily financed by the Government of India. I mean, do you see the synergistic effect of this on the assembly business also? Because what I feel is you might actually price out the comp
Q
Thanks for the opportunity. And apology, I am in a bad network, so if my call gets dropped. Two, three very quick clarifications. Sir, first, in our Electronics business, typically what is the length of contract we do in this business and same for Railways business?
Jasbir Singh
Well, depending on which applications we are serving, normally it takes close to about 2.5 to 3 years to onboard a customer. In Railways division, it's a process of four years minimum if everything goes fine at all the steps. And then you become Part 2. And then finally after supplying 300 coaches or three years, then you become Part 1 supplier in Railways. In Electronics, generally the contracts are longish time, ranging from three to five years contracts. Secondly on the Ascent Circuits, this is slightly a dated question. In terms of, I was just trying to understand what was the incentive fo
Q
Thank you everyone for joining on the call. I hope we have been able to address all your queries. For any further information, kindly get in touch with our Head of IR, Ravi Kharbanda or Rohit Singh from our IR team, or Strategic Growth Advisors' team. And we wish you all a very happy 76th Republic Day in advance. Thank you. Have a great day ahead.
Management
Speaking time
Jasbir Singh
37
Moderator
18
Natasha Jain
4
Naushad Chaudhary
4
Sudhir Goyal
3
Aditya Bhartia
3
Amit Mahawar
3
Manoj Gori
3
Vipraw Srivastava
3
Bhoomika Nair
2
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Opening remarks
Jasbir Singh
Hello, good morning. Greetings for 2025. And thank you for joining from different time zones. On the call today I am joined by Mr. Daljit Singh – Managing Director; Mr. Sudhir Goyal – Group CFO; Mr. Sanjay Arora – CEO of Electronic division and Whole-time Director of IL JIN Electronics. We have uploaded our Results Presentation on the Exchanges, and I hope everybody had an opportunity to go through the same. I am pleased to report robust quarterly performance in Quarter 3 FY '25, with revenue of Rs. 2,133 crores, registering growth of 65%. Operating EBITDA almost doubled to Rs 162 crores, recording 97% growth. And PAT grew to Rs. 37 crores from a loss of minus Rs. 1crore over the corresponding period previous year. As you are aware, we have three business divisions, namely: • • The Consumer Durable division Electronics division • Railway Sub-system & Defense Division.
Let me take you through the divisional performance
The Consumer Durable division, which consists of Room AC and its components, plus non-room AC components and washing machine. The RAC industry continued the growth momentum with channel inventory filling during Quarter 3 in anticipation of the positive summer season. We recorded the blended division growth of 67%, led by both RAC and non-RAC vertical. RAC grew by 71% and non-RAC vertical grew by 43%. And the resultant EBITDA of Rs. 116 crores, reflecting growth of 150% over last year. The strong performance is driven by the underlying growth in the RAC industry, coupled with conversion of new customers from gas charging to ODM, and deepening of customer relationships. Beyond the RAC, the commercial AC is picking up thrust. I am pleased to report addition of one new customer and strengthening of the commercial AC order book. The washing machine JV with Resojet is progressing well, and trials are in progress with new customers. And we expect to commence the mass production from the new p
To sum up
We witnessed a robust quarter, and we look forward, the road map is in place for multi-fold scale up for each division as expansion strategy unwinds. Now, let me hand over to Sudhir Goyal – our CFO, for the financial highlights.
Sudhir Goyal
Hello, everyone. Good morning. I am pleased to report a strong performance for Quarter 3 and nine-months for Financial Year ‘25. Let me first take you through the Quarterly Consolidated Financial Highlights. The consolidated revenue for Quarter 3 Financial Year ‘25 grew by 65% year-on-year to Rs. 2,133 crores compared to Rs. 1,295 crores in the previous year. And operating EBITA increased to Rs. 162 crores during the quarter, compared to Rs. 82 crores last year, reflecting a strong growth of 97% year-on-year. Please note, operating EBITDA is before impact of ESOP expenses and other non-operating income and expenses. We recorded PAT of Rs. 37 crores against the loss of Rs. 1 crore in the previous year same quarter.
Let me take you through the Nine Months Financial
Revenue for nine-months Financial Year ‘25 increased to Rs. 6,219 crores compared to Rs. 3,924 crores in the previous year, recording a growth of 59%. Operating EBITDA increased to Rs. 482 crores against Rs. 285 crores in nine-months Financial Year ‘24, with a growth of 69% year-on- year. PAT increased to Rs. 133 crores compared to Rs. 40 crores in previous year, reflecting a growth of 228%. Now, let me take you through the Divisional Performance: Firstly, revenue and operating EBITDA details are not comparable with the published segmental results. To start with, Consumer Durable division: The division reported revenue of Rs. 1,555 crores in Quarter 3 Financial Year ‘25, compared to Rs. 932 crores, reflecting a growth of 67% year-on-year on the back of strong RAC business growth, driven by positive season. Operating EBITDA for the quarter increased by 150% year-on- year and stood at Rs. 116 crores compared to Rs. 46 crores in Quarter 3 Financial Year ‘24.
Coming to Electronics Division performance
Revenue and operating EBITDA details are not comparable with published segmental results. That revenue for the quarter increased to Rs. 472 crores compared to Rs. 241 crores in previous year, reflecting a growth of 96% year-on-year. Operating EBITDA for the quarter increased by 193% year-on-year and stood at Rs. 34 crores compared to Rs. 12 crores in Quarter 3 Financial Year ‘24. I will reiterate that we are progressing well and expect to close the year with revenue growth in excess of 55% for Financial Year ‘25. There is revision in guidance, earlier was 45%, now we are going by more than 55% during the year. Moving to Railway Sub-division & Defense division performance: Again, to emphasize the revenue and operating EBITDA, details are not comparable with the published segmental results. The division reported a muted quarter owing to slower offtake, as mentioned earlier. The revenue for the quarter stood at Rs. 106 crores, reflecting a decline of 13% year-on-year. And resultant operat
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