The air-conditioner that hums quietly in a million Indian homes has a hidden backstory and chances are, it traces back to Amber Enterprises.
For decades, Amber lived behind the logos of the brands it supplied to. The company made the guts of air-conditioners.
But now, it wants to be more than the anonymous hand behind the machine. It wants to power India’s electronics factories too.
It sounds like the perfect Make-in-India story. But in business, transformation stories rarely move in straight lines.
Amber’s September quarter results told a sobering truth. Revenue fell 2% year-on-year to Rs 1,647 crore. Operating profit dropped by nearly 24%, with margins at 5%. The company reported a loss of Rs 32 crore, compared to a profit of Rs 21 crore a year ago. For a company that had grown revenue by 44% in the previous quarter, this was a reminder that manufacturing fortunes can change with the weather—literally.
The company’s core business, room air-conditioners, suffered from an unusually cool summer and a mistimed GST cut.
Customers waited for lower prices and retailers held back on purchases. The entire RAC industry shrank during the quarter. Amber’s revenue from consumer durables fell 18%, which was actually better than most of its peers.
Still, a loss is a loss.
Management insists the pain is short-term. They believe inventories should normalise by March and the company expects its consumer durables division to grow 13–15% in FY26, helped by its widening product range and a faster-growing commercial AC segment.
But it’s also true that this is the second straight year where the weather has dictated the P&L more than management strategy. In that sense, Amber’s problem is fundamental.
A business that depends on weather and consumer sentiment cannot stay still for long. Amber is learning that.
The great diversification
For a few years now, Amber has been quietly re-engineering its business model. Its electronics division, once a small supplier of PCBs for inverter ACs, has turned into the company’s main growth engine. Revenue from this division grew 30% year-on-year in the September quarter.
The journey began in 2018 with a small printed circuit board assembly (PCBA) unit. Seven years later, Amber makes multi-layer PCBs, power electronics and now complete box-build solutions for industrial automation and energy systems.
The change in its ambition is dramatic. The company’s electronics division now contributes around 40% of revenue and management expects it to hit Rs 3,200 crore this year, up from Rs 2,450 crore last year. Over the next few years, it’s targeting $1 billion in annual revenue from electronics alone.
Amber is spending big to climb the value chain. It has bought a majority stake in Power-One Micro Systems, a Bengaluru firm making solar inverters, EV chargers and industrial UPS systems, with margins of 17–18%, well above its core business. Around the same time, it announced a 40.2% controlling stake in Israel’s Unitronics, a PLCs and automation software maker with margins near 30%.
Together, the deals mark a clear pivot from assembling air conditioners to owning smarter, relatively higher-margin electronics.
These are businesses that require deep domain expertise, long gestation and strong global linkages. But they also offer something Amber badly needs—stability. Air-conditioner demand rises and falls with the heat. Factory automation and EV infrastructure are longer-cycle, higher-margin opportunities.
Amber is also investing heavily in its own capacity. Its subsidiary has filed for approval under the Electronics Manufacturing Component Scheme (EMCS) for a Rs 990-crore multi-layer PCB plant in Hosur. Construction is progressing, with operations expected to begin by late FY27. A second project, a Rs 3,200-crore joint venture with Korea Circuit in Jewar, Uttar Pradesh, will produce high-density interconnect (HDI) PCBs for advanced electronics and industrial applications.
It’s an ambitious plan, but also an expensive one.
Capex, cash and consequences
Amber plans a Rs 700–850 crore capex this year, mostly for electronics. It raised about Rs 1,370 crore in Q2 through various fundraises, including a Rs 1,000 crore QIP. Despite that, net debt rose to Rs 1,580 crore in September from Rs 1,090 crore in March, as working capital swelled to 95 days after repaying nearly Rs 2,000 crore to suppliers. Management still aims to end the year cash positive and cut working capital to 30–35 days. This is despite large ECMS projects worth Rs 990 crore at Ascent and Rs 3,200 crore at Korea Circuits remain on the horizon.
The problem is, when everything is growing, capex, subsidiaries, working capital and finance costs, it’s easy for profitability to lose ground.
Brokerages across the board have turned more cautious. After a weak September quarter and rising finance costs from acquisitions, most have cut their earnings estimates for the year. The message is clear: near-term profitability will take longer to catch up with Amber’s expansion plans and the onset of winter is unlikely to make things any easier for its cooling business.
For a company now trading at a price-to-earnings multiple of 113, that matters. The market is paying premium valuations for future growth that is still being built brick by brick. At such lofty levels, perfection is already priced in. Any delay in inventory normalization, a slower integration of new businesses, or another round of commodity cost spikes could quickly cool investor enthusiasm.
That is what makes Amber’s transformation story fascinating. The market is treating it as a tech-led manufacturing play, the kind that deserves a premium. But on the ground, it remains a cyclical industrial business trying to build new muscle while managing old wounds. The rewards could be significant, but so are the risks.
The other engine
While electronics draws most of the attention, Amber’s railway and mobility business is quietly building scale. The division contributes about 8% of total revenue and grew 7% year-on-year in the September quarter, backed by an order book worth over Rs 2,600 crore, with another Rs 400–500 crore of new orders expected in the coming quarters. A new plant for train systems is set to start production by March 2026, while another unit for critical rail components will follow in FY27.
Management expects this division to double revenue within two years. If that happens, it could provide the stability that Amber’s volatile AC business often lacks.
The bigger picture
Amber’s ambition fits neatly into the government’s industrial vision of self-reliance in electronics, Make-in-India manufacturing and PLI-linked localization. It’s the kind of story investors love.
But industrial policy doesn’t change physics. Big capex plans and supply chains still take time to turn into returns.
If the company’s own projections hold, revenue could rise about 20% over the next 2-3 years, with margins improving from roughly 7% in FY25 and 5% in Q2FY25 to just over 8%. The direction is right. But the pace will decide how much of that promise becomes profit.
In many ways, Amber mirrors India’s manufacturing paradox—spending more before earning more. Diversification isn’t the same as profitability.
Investors are paying a premium for what Amber might become. To justify that, it will need to deliver steady cash flows, firmer margins and proof that its electronics pivot can stand on its own without the crutch of air-conditioners.
For decades, Amber built the cooling machines of India’s middle class. Now it wants to make the machinery of India’s industrial future. The real test is whether it can keep its finances steady, because at 113 times earnings, even a small chill can shake things up like a cold wave.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
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Manvi Aggarwal has been tracking the stock markets for nearly two decades. She spent about eight years as a financial analyst at a value-style fund, managing money for international investors. That’s where she honed her expertise in deep-dive research, looking beyond the obvious to spot value where others didn’t. Now, she brings that same sharp eye to uncovering overlooked and misunderstood investment opportunities in Indian equities. As a columnist for LiveMint and Equitymaster, she breaks down complex financial trends into actionable insights for investors.
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