Amber Enterprises Shares Tumble 14% on Disappointing Q2FY26 Results, Reporting a Loss

Amber Enterprises India Limited experienced a sharp 14% drop in its share price, reaching ₹6,737.35 during Friday's trading session, following the release of its second-quarter financial results for FY26. The company posted flat revenues of ₹1,647 crore and a substantial 19% year-on-year decline in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) to ₹98 crore. EBITDA margins also compressed by 128 basis points (bps) year-over-year to 5.5%, impacted by lower revenue contribution and operational deleverage.

A significant concern for investors was the net loss of ₹32 crore reported for Q2FY26, a stark contrast to the net profit of ₹21 crore recorded in the corresponding quarter of the previous year. This loss was attributed to higher financing costs from the Power-One stake purchase, elevated inventory levels, and losses from joint ventures.

The room air conditioner (RAC) industry faced headwinds from unfavorable weather conditions and delays in purchases due to Goods and Services Tax (GST) rate changes. While Q2 is typically Amber's weakest quarter due to monsoons, the company is optimistic about inventory normalization and expects the GST reduction on RACs (from 28% to 18%) to boost industry growth by enhancing affordability and penetration.

ICICI Securities noted that while the air conditioner segment was weaker due to inventory overhang, Amber managed its EBITDA margins through an improved product mix. Consumer durables remained subdued, but other segments showed strong growth. The brokerage views Amber's diversification into a broader Electronics Manufacturing Services (EMS) player, with ongoing capex for PCB and copper clad manufacturing, positively. They believe the current challenges are temporary and maintain a 'BUY' rating on the stock, seeing strong growth potential through diversification.

Impact: This news has had a severe immediate impact on Amber Enterprises' stock price, causing a significant drop, reflecting investor concern over the quarterly performance. The broader implications for the consumer durables and manufacturing sectors will depend on industry recovery and Amber's execution of its diversification strategy.

Impact Rating: 9/10

Difficult Terms Explained: EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operational profit before accounting for non-operating expenses and non-cash charges. bps: Basis Points. A unit of measure equal to one-hundredth of one percent (0.01%). Used here to describe the change in profit margins. YoY: Year-over-Year. A comparison of a company's performance in a given period with its performance in the same period of the previous year. QoQ: Quarter-over-Quarter. A comparison of a company's performance in a given quarter with its performance in the immediately preceding quarter. GST: Goods and Services Tax. An indirect tax levied on the supply of goods and services in India. RAC: Room Air Conditioner. A common household appliance. EMS: Electronics Manufacturing Services. Companies that provide design, manufacturing, and repair services for electronic products for other brands. PCB: Printed Circuit Board. A component used to mechanically support and electrically connect electronic components using conductive tracks, pads, and other features etched from copper sheets laminated onto a non-conductive substrate. JVs: Joint Ventures. A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task.