Amber Enterprises India Ltd exited FY26 with a healthy 22% year-on-year revenue growth at ₹12,186 crore, driven by its consumer durables and electronics segments.
However, management has flagged margin pressure building in its core consumer durables business amid soaring input and labour costs.
The consumer durables division — which contributes nearly 72% of total revenue and includes room air-conditioners (RAC) and related products — remains the backbone of the company.
Margin squeeze
Despite Q4 being seasonally strong for AC companies, segment margins dropped to 7.5% in Q4FY26 from 8.4% in Q4FY25.
For the full year, margins slid to 7.1% in FY26 from 7.7% last year.
Copper-clad laminate and gold prices have risen over 60% in the past year, while minimum wages have increased sharply in key states such as Haryana and Uttar Pradesh.
Amber has implemented a cumulative RAC price hike of around 14%. However, in consumer durables, price pass-through typically takes one quarter, while in PCB manufacturing it can take nearly two quarters.
As a result, management has guided for a temporary margin decline of 50–100 basis points over the next few quarters.
Amber already operates at sub-10% Ebitda margins. Even a 1% decline acts as a dampener for earnings growth. In FY26, operating margins were flat at 8% versus FY25.
Nirmal Bang Institutional Equities said management’s 14% growth guidance for this segment in FY27 appears conservative relative to stronger volume outlooks from branded RAC companies.
The stock has declined nearly 17% since Q4FY26 and FY26 results were announced on 16 May.
Electronics pivot
Amber is repositioning itself as a broader electronics and industrial manufacturing company.
The electronics segment revenue grew 49% to ₹3,268 crore in FY26, while Ebitda surged 89%.
In Q4FY26, segment margins expanded to 10.8%, making it one of the company’s highest-margin businesses.
According to Motilal Oswal Financial Services, revenue contribution from non-RAC businesses is expected to increase from 31.2% in FY26 to nearly 34.2% in FY27, partly offsetting commodity and labour cost pressures.
The brokerage expects the electronics business to grow around 40% in FY27, aided by new PCB facilities and rising import-substitution opportunities.
Mobility expansion
The railway and mobility business is also scaling up rapidly.
Amber has an order book of over ₹2,600 crore and expects 30–35% growth in FY27 and FY28.
Nirmal Bang estimates the revenue mix to gradually shift from around 70:30 (consumer durables: EMS + mobility) in FY26 to 60:40 by FY28. This shift could act as a margin lever, given the relatively higher profitability of these segments compared to consumer durables.
Amber plans ₹1,800–2,000 crore of capex in FY27 across PCB plants, RAC expansion and railway facilities.
The stock currently trades at around 34x FY28 estimated earnings, showed Bloomberg data.
That valuation appears expensive, particularly given ongoing margin pressures in its largest revenue segment.