Why Amber Enterprises Share Price is Falling

With the revival in the real estate industry and changing lifestyles of people, the air conditioning (AC) industry has witnessed tremendous growth in the last few years.

Amid this upbeat growth in the AC industry, many AC stocks have seen their share price rise.

Amber Enterprises, with the largest market share of 26%, has seen its share price rise more than 60% in the last five years.

However, in 2022, the company's shares have fallen more than 38%.

Let us take a look at some reasons why this could have happened.

#1 Poor quarterly results

Amber Enterprises reported a net loss of Rs 29.8 million (m) for the September 2022 quarter as against net profit of Rs 74.3 m in the year ago quarter as finance costs increased.

For the September 2022 quarter, the company's finance costs rose to Rs 240 m from Rs 60 m in September 2021.

The company has also taken on debt to fund its capex plans. It is setting up two green field facilities and expanding its air conditioners and components capacity.

Revenue for the quarter, however, jumped 27.7% YoY to Rs 7.5 billion (bn) from Rs 5.8 bn in the year-ago quarter.

#2 Changes in shareholding pattern

Amber Enterprises saw a decline in DII (domestic institutional investor) holding as ICICI Prudential Life offloaded a 0.5% stake in the company on 12 October 2022.

FIIs have also been disinvesting their stake in Amber Enterprises since March 2022. FII stake stood at 28.96% in the September 2021 quarter. It now stands at 26.44%.

The was due to rising interest rates in the developed markets, making emerging markets like India less attractive for FIIs.

For more details, you can have a look at Amber Enterprises latest shareholding pattern.

How shares of Amber Enterprises have performed recently

Amber Enterprises share price is down 38% in the last year. However, in the last month, share price has risen 1.7%.

The company touched its 52-week high of Rs 4,025.9 on 2 May 2022 and its 52-week low of Rs 1,920 on 30 November 2022.

It is currently trading just 6.6% away from its 52-week low.

Amber Enterprises is currently trading at a PE (Price to Earnings) multiple of 52.7x, with the industry PE ratio being 65.8x. This makes it undervalued on the PE front.

About Amber Enterprises

Amber Enterprises India produces heating and ventilation equipment.

The company dominates the original equipment manufacturer (OEM), original design manufacturer (ODM) market for room air conditioners in India.

The company is engaged in the business of manufacturing consumer durable products.

It designs and produces a wide range of goods, such as HVAC solutions and RAC, RAC, and Non-RAC components for mobility applications.

It currently has 23 production facilities spread over 8 locations in India, allowing for quick turnaround.

Additionally, it produces multi-flow condensers, inverter and non-inverter printed circuit boards, heat exchangers, motors, and other essential and reliable functional components for RACs.

For more details about the company, you can have a look at Amber Enterprises India's company fact sheet and quarterly results.

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