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The Indian air conditioning (AC) market is experiencing a surge in demand, fueled by a prolonged summer and rising disposable incomes. This trend has been particularly beneficial for Amber Enterprises, a leading player in the refrigeration and air conditioning sector, as evidenced by its robust third-quarter earnings and record-high share prices. The company's performance reflects the overall optimism surrounding the Indian AC industry, which is poised for significant growth in the coming years.
Amber Enterprises' management has characterized the current year as the best yet for the Indian AC industry, predicting a 3-3.5x growth in the segment over the next five years. This expansion is attributed to factors such as increasing urbanization, rising middle-class incomes, and a growing preference for comfortable living conditions. The company anticipates that the room air conditioner (RAC) sector will witness a 30% sales surge compared to last year, reaching a sales volume of 1.30 crore AC units. This optimistic outlook is supported by the fact that Amber has already seen a twofold increase in its RAC segment due to the prolonged summer and lower inventory levels.
Amber Enterprises is confident of outpacing the industry average growth rate and is projecting stronger performance in both the third and fourth quarters compared to the previous year. The company's commitment to increasing localization potential and diversifying into higher-margin segments is also contributing to its success. These strategic moves are evident in the company's growing order book for Light Commercial ACs and its foray into the bare printed circuit board (PCB) segment. Amber expects the PCB market to reach Rs 80,000 crore by FY30, offering significant growth opportunities for Indian players.
The company's financial performance in the September quarter underscores its positive trajectory. Amber Enterprises reported a consolidated revenue from operations of Rs 1684.70 crore, representing an 82% year-on-year growth. The company also achieved a net profit of Rs 20.96 crore, a significant improvement from a net loss recorded in the same period last year. This impressive topline growth was primarily driven by the robust performance of the consumer durables business. The company's operating EBITDA in the quarter reached Rs 120 crore, a substantial 85% increase compared to the previous year.
The electronics division of Amber Enterprises also witnessed strong growth in the September quarter, with revenue rising by 98% year-on-year to Rs 492 crore. This surge was attributed to orders from the defense segment and the imposition of an anti-dumping duty on Chinese PCBs. Amber has set an ambitious target of achieving over 45% revenue growth in the electronics manufacturing services (EMS) space for the entire year. To support this expansion, the company is constructing a new plant in Tamil Nadu to increase production capacity and has formed a joint venture with a South Korean company to manufacture PCBs. This joint venture also includes a buyback component, where the Korean partner will purchase a percentage of the output for the first two years.
Amber's mobility division is also poised for growth with the upcoming commencement of operations at its SIDWAL greenfield facility in the first quarter of FY26. These strategic investments and expansion plans highlight Amber Enterprises' commitment to capitalize on the burgeoning AC market in India. The company's strong financial performance, optimistic outlook, and strategic initiatives position it well to navigate the growth opportunities in the coming years and further strengthen its position as a leader in the refrigeration and air conditioning sector.