Change in product mix, high raw material costs impact Amber's profitabilityAMBER - 2321 Change: 74.40 (3.31 %)
News: Amber Enterprises consolidated revenue increased by ~21% YoY to Rs. 1937 led by recovery in demand of cooling products and components. Delay in passing of higher raw material prices along with sharp increase in employee cost (up 44% YoY) brought down EBITDA margin by 240 bps YoY to 6.5%. PAT fell by 22% YoY to Rs. 59 crore dragged by lower EBITDA margin and higher interest outgo.
Views: We believe that a change in product mix and higher input costs impacted profitability in Q4. This, combined with higher interest outgo (up 77% year on year to Rs. 18.6 crore), resulted in sharp drop in the Q4 bottom line. Although, the management commentary suggest company to achieve 30% + revenue growth in FY23E with recovery in margins. We believe price hikes and improved product mix are key variables to watch for the company's overall profitability.