Amber Enterprises Navigates Headwinds with Strategic Diversification in Q2 & H1 FY26

Amber Enterprises India Limited, a prominent player in the manufacturing sector, recently announced its financial results for the second quarter and first half of fiscal year 2026. The company reported a consolidated revenue of INR5,096 crores for H1 FY26, marking a robust 25% year-on-year growth. However, the second quarter presented a mixed picture, with consolidated revenue remaining almost flat at INR1,647 crores compared to the previous year. While H1 operating EBITDA grew by 13% to INR361 crores, Q2 saw a decline of 19% to INR98 crores. The company recorded a loss after tax of INR32 crores in Q2 FY26, primarily attributed to higher financing costs stemming from recent acquisitions and elevated inventory levels. Despite these short-term pressures, management expressed optimism about inventory normalization by Q4 and highlighted strategic initiatives driving future growth.

The Consumer Durables division, a core segment for Amber, demonstrated resilience amidst a challenging market. The overall Room Air Conditioner (RAC) industry experienced a significant decline of 30-35% in Q2, largely due to unfavorable weather conditions and a deferment of purchases by customers ahead of the GST rate reduction announcement. Despite this industry-wide downturn, Amber's Consumer Durables revenue saw a more contained decline of 18% year-on-year, reaching INR873 crores in Q2 FY26. The management remains confident in the division's ability to achieve a 13-15% growth for the full year, underpinned by a diversified product portfolio, increased wallet share with existing customers, and expansion in component businesses. The recent reduction in GST on RACs from 28% to 18% by the Government of India is expected to boost affordability, drive deeper market penetration, and support premiumization, providing a significant tailwind for the industry.

Strategic Expansion and Diversification

Amber's Electronics division continued its strong growth trajectory, with H1 FY26 revenue surging by 60% to INR1,409 crores and operating EBITDA increasing by 30% to INR88 crores. This growth was driven by both the PCBA (Printed Circuit Board Assembly) and Bare PCB verticals. The company is actively transforming into a full-stack EMS (Electronics Manufacturing Services) provider, expanding its capabilities to include complete box-build products in power electronics, energy, and automation markets. Key strategic moves include ILJIN Electronics' acquisition of a 60% majority stake in Power-One Microsystems, a significant player in battery energy storage systems, solar inverters, EV chargers, and industrial UPS. This acquisition, consolidated from August 2025, is expected to contribute INR265-INR275 crores in revenue this year. Additionally, ILJIN's subsidiary acquired a 40.2% controlling stake in Unitronics, an Israel-based company specializing in industrial automation and control systems, further strengthening Amber's position in industrial applications.

On the expansion front, the Ascent multilayer PCB project at Hosur, Tamil Nadu, has received ECMS approval, with a planned investment of ₹991 crores. Trial production is expected by Q2 FY27, with commercial production commencing from Q3 FY27. Furthermore, Amber is establishing the Ascent-K Circuit facility in Jewar, Uttar Pradesh, through a joint venture with Korea Circuit, focusing on HDI, Flex, and Semiconductor Substrates PCBs. This project, with a planned investment of ~₹3,200 crores, is awaiting U.P. State cabinet approval and ECMS decision, with construction expected to begin by January 2026 and revenue contributions anticipated from FY27-FY28.

Railway Sub-systems and Defense Division on Track

The Railway Sub-systems and Defense division also demonstrated positive momentum, recording a 7% growth in Q2 FY26 revenue to INR132 crores and an operating EBITDA of INR21 crores. The division benefits from a robust order book visibility exceeding INR2,600 crores. Construction for Sidwal's Greenfield facility for Heating Ventilation Air Conditioning (HVAC), Pantries, Doors, and Gangways is progressing, with trial operations expected from Q3 FY26 and commercial production from Q4 FY26. The Yujin Machinery joint venture facility for Pantograph, Brakes, Driving Gear, and Couplers is now ready, with product development underway and commercial production expected from H1 FY27. Special cooling products for defense applications are also gaining traction, poised to contribute meaningfully in the coming years. Management is optimistic about doubling the division's revenue over the next two financial years.

Financial Health and Outlook

On the balance sheet front, Amber Enterprises successfully raised approximately INR1,000 crores through a Qualified Institutional Placement (QIP) from marquee investors. These funds, along with INR1,750 crores secured by ILJIN Electronics, are being strategically deployed for debt reduction and future capital expenditures. The company aims to be cash positive on a net debt level by year-end. Consolidated capex for FY26 is projected to be between INR700-850 crores. While PCB vertical margins were impacted by raw material price increases, management expects a revival in margins by Q4 due to price variation clauses with customers. The Electronics division's margins are anticipated to reach 8-9% by year-end and achieve double digits next year. Overall, Amber Enterprises is demonstrating strategic clarity and disciplined execution, leveraging diversification and timely investments to navigate market fluctuations and position itself for sustained long-term growth across its key segments.