Amber Enterprises India is making significant progress in its business transformation, particularly in the electronics sector, which is expected to experience substantial growth in the medium term.

The company's core consumer durables segment, driven primarily by room air conditioners (RAC), has shown strong revenue growth and is expected to continue performing well in the second half of FY25. Although there has been a contraction in gross margins due to a change in revenue mix, operational efficiencies have led to an increase in EBITDA margins compared to the previous year.

However, the railway mobility business is expected to face ongoing challenges, resulting in weak growth in the near future. Analysts have noted that while Amber's growth trajectory is promising, the return ratios are currently lower than the cost of capital, and the company is generating negative free cash flow. As a result, ICICI Securities has maintained a REDUCE rating on the stock and adjusted the target price to INR 5,625 from INR 3,850, which implies a price-to-earnings ratio of 56/42x for FY26/27 estimates.