Amber Enterprises Q2 Review - Brand Inventory Hits Sales; Gross Margin Steady: Dolat Capital
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Dolat Capital Report
Amber Enterprises India Ltd.'s Q2 FY22 sales grew 44% YoY to Rs 5.9 billion and gross margin stood flat YoY at 19.3%.
While sales were hit due to brand inventory, gross margin was flat due to its cost plus model with customers. This along with cost control, ensured a 50 basis points YoY Ebitda margin expansion at 5.8%
Amber Enterprises continues to be a good play on the localisation and production linked incentives theme, with opportunities in the AC component space, where total import content is still at 60%, which it can service as a local partner for brands.
Although we believe Amber is a good story on AC localization, we recommend entering the stock on dips.
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