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Amber, Epack RAC margins hit by short-term headwinds but recovery expected

ICICIdirect Research 22 May 2026 DISCLAIMER

Amber Enterprises India – Temporary margin headwinds, structural story intact

  • Amber reported a mixed operational performance in Q4FY26, with revenue coming in at ₹4,148 crore (up 10.5% YoY and 40.9% QoQ). The Electronics division continued to remain the key growth driver, while the Consumer Durable segment faced multiple near-term headwinds including inconsistent summer, high channel inventory and elevated raw material costs. EBITDA margins stood at 8.6% (up 78 bps YoY and 27 bps QoQ), supported by strong profitability improvement in the Electronics segment where margins expanded to 10.8% versus 5.9% in Q4FY25.
  • Going ahead, Management has guided for ~40% revenue growth in the Electronics division, 30-35% in railways while the Consumer Durable segment is likely to grow broadly in line with industry trends. For FY27, management has indicated EBITDA margin pressure of ~50-100 bps owing to sharp raw material inflation and currency depreciation, though this shall be transitory.
  • Amber is strategically diversifying from a RAC manufacturer into higher value-added and non-seasonal segments such as components, PCB/PCBA, power electronics and railway subsystems to reduce cyclicality and improve business stability. We maintain our BUY rating on stock with a target price of ₹8,250.

EPACK Durable – Weak quarter amid RAC slowdown; diversification strategy progressing well

  • EPACK Durable reported a weak operational performance during the quarter as the RAC business remained impacted by elevated channel inventory, commodity cost inflation and PLI reversal.
  • Revenue stood at ₹591 crore, declining 8% YoY while increasing 38.2% QoQ. The RAC segment de-grew 24.7% YoY, whereas the SDA(small domestic appliances) & LDA (large domestic appliances) and Components segments delivered healthy growth of 32.1% YoY and 50.1% YoY respectively. EBITDA margins came in at 4.4%, down 683 bps YoY and 304 bps QoQ, impacted significantly by PLI reversal of ~₹32 crore.
  • Going ahead, Management highlighted improving RAC order inflows and better industry demand outlook entering FY27, supported by channel inventory normalisation and rising temperature levels. Further, the partnership with Hisense has become operational while SDA, LDA and components shall continue to deliver strong growth aided by client additions. In combination, it shall drive topline growth of 30% CAGR over FY26-28E, driving operating leverage and profitability. Accordingly, we maintain our BUY rating on EPACK Durable with a target price of ₹285.

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