For Q1FY2019, Amber Enterprises (Amber) posted a 9% yoy fall in AC sales volumes owing to unseasonal rains in April & May which resulted in Inventory build up across brands. The company is expecting liquidation of inventory in Q2 and added few new clients during the quarter.
Outlook and Valuation: We have maintained our earnings estimates in view of expected recovery in AC demand in subsequent quarters and synergies benefits from its new acquisitions. We expect Amber to report a CAGR of ~28%/51% in consolidated revenue/earnings over FY18-20E. We maintain BUY with a target price of `1135 (25x FY2020E EPS).
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