ICICI Direct: Lockdown Hits Amber Enterprises’ Peak Season Performance  
An employee inserts a screw on the cabinet line at an air conditioner manufacturing facility. (Photographer: Udit Kulshrestha/Bloomberg)

ICICI Direct: Lockdown Hits Amber Enterprises’ Peak Season Performance  

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BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Amber Enterprises India Pvt.Ltd.’s Q1 FY21 (peak season for air conditioners sales) revenue was hit by lower volume offtake by its key clients mainly due to lockdown.

However, according to the management, inventory liquidation at channel level started soon after relaxation from lockdowns. Inventory at the channel level was at approximately 10 lakh units by the end of Q1 FY21 versus 25 lakh units in Q4 FY20.

We believe strong demand from tier two, three cities would help it to further reduce by Q3 FY21. Further, its component and mobility business (39% of topline) is also gaining traction with improved demand for room air conditioners.

Under the component and mobility business, performance of Sidwal Refrigeration Industries Pvt Ltd. remains intact with Ebitda margin of approximately 17% during the period.

We believe Amber is likely to benefit from the government’s flagship programme ‘Atmanirbhar Bharat’, which aims to promote domestic manufacturing of air conditioners and components over the long term.

Click on the attachment to read the full report:

ICICI Direct AmberEnterprises Q1FY21 Result Update.pdf

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