Mehabe score: 5 G Factor: 4 Piotski Score: 4 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 4.
Description
Amber Enterprises India Ltd incorporated in 1956, has a 23.6% share in the total Room Air Conditioner market # and is a prominent solution provider for the Air conditioner OEM/ODM Industry in India. #
Main Points
Leadership
Largest induction motor manufacturer for the HVAC industry in India.
Market leader in PCB manufacturing and Assembly.
1st company to provide indigenized solutions for roof-mounted package units (RMPU) for Indian Railways and metro. #Site:AMBERMain Symbol:AMBER
Stock trades at 2976.0, above its 50dma 2970.51. It also trades above its 200dma 2718.65. The stock remains bullish on techicals
The 52 week high is at 3667.50 and the 52week low is at 1642.20
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 6.25 times its book value
– has a low return on equity of 9.97% for last 3 years.
-Dividend payout has been low at 2.12% of profits over last 3 years
-Debtor days have increased from 103.94 to 128.75 days.
-Promoter holding has decreased over last 3 years: -3.73%
Competition
– The industry trades at a mean P/E of 35.6x. Amber Enterp. trades at the industry’s max P/E of 122.9x. AMBER trades at a P/E of 123.0x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 7.0. AMBER has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is 7.1%. The max 1- month return was given by Cosmo Ferrites: a return of 57.32 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 708.0 cr compared to Rs 259.0 cr for period ended Jun 2020, a rise of 173.4%
Company reported operating profit of Rs 42.0 cr for period ended Jun 2021, operating profit margin at 5.9 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Jun 2021 was Rs 3.69 compared to Rs 22.4 for previous quarter ended Mar 2021 and Rs -7.14 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3479.0 cr for period ended TTM vis-vis sales of Rs 3031.0 cr for the period ended Mar 2021, a healthy growth of 12.9%. The 3 year sales cagr stood at 8.1%.
Operating margins expanded to 8.0% for period ended TTM vis-vis 7.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 116.0 cr for period ended TTM vis-vis sales of Rs 82.0 cr for the period ended Mar 2021, rising 29.3%.
Company recorded a Net Profit CAGR of 7.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 6.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 67% on a 1 Year basis vis-vis a return of 47% over the last 3 Years. – The compounded sales growth on a TTM bassis is -24% vis-vis a compounded sales growth of 13% over the last 3 Years. – The compounded profit growth on a TTM basis is -49% vis-vis a compounded profit growth of 10% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 28.11% vis-vis 28.06% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 24.39% vis-vis 24.05% for Mar 2021
Conclusion
– – Stock is trading at 6.25 times its book value
– has a low return on equity of 9.97% for last 3 years.
-Dividend payout has been low at 2.12% of profits over last 3 years
-Debtor days have increased from 103.94 to 128.75 days.
-Promoter holding has decreased over last 3 years: -3.73%
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 2970.51 and is trading at 2976.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
