Amber Enterprises shares down 15% after management guides for margin pressure

Shares of Amber Enterprises India

Ltd. declined as much as 15% on Monday, May 18, after the management guided for margin pressure going ahead. With today's fall, the stock saw its biggest single-day decline since May 2022.

The company reported EBITDA margins ahead of Street expectations, while revenue remained largely in line with estimates.

Growth in the consumer durable segment remained subdued during the quarter, while the electronics and railway sub-system businesses delivered strong performance.

Revenue from the consumer durable segment rose 6% year-on-year, while the electronics division and railway sub-system business reported growth of 21% and 22%, respectively.

On the margin front, the consumer durable segment saw margins decline 40 basis points to 7.2%. Margins in the electronics division expanded sharply by 480 basis points to 10.8%, while margins in the railway sub-system business declined due to a higher base effect.

Overall EBITDA margin improved 70 basis points year-on-year to 8.6%, ahead of the Street estimate of 7.8%. The company also reported its highest EBITDA margin in the last 20 quarters.

Gross margins expanded 220 basis points year-on-year to 18.8%, supported by the full integration of acquisitions including Shogini Technoarts, Power One Electronics and Unitronics.

However, room air-conditioner (RAC) segment margins remained under pressure due to elevated copper prices, while railway margins were impacted by a high base.

For FY26, the consumer durable segment reported revenue growth of 14%, in line with management guidance. The company expects the electronics division to continue its strong momentum and deliver around 40% revenue growth in FY27.

The railway division reported 19% revenue growth in FY26, and management expects the business to grow 30% to 35% in FY27.

The quarter also included an exceptional one-time impairment related to investment in Shivalik, along with losses from a joint venture.