Amber Enterprises is Nuvama's top EMS stock pick; here's why

Nuvama Institutional Equities on Monday said Amber Enterprises India Ltd remained its top pick in the Electronics Manufacturing Services (EMS) universe, citing strong execution, sector-leading scale in electronics and improving visibility across business verticals. The brokerage reiterated its 'Buy' rating on the stock with a December 2026 target price of Rs 9,100, valuing the company on a sum-of-the-parts basis. The stock is down 11 per cent in 2025 so far.

Following a recent management meeting, Nuvama said the company reiterated its guidance, implying a 13–15 percentage point outperformance versus the consumer durables industry. The brokerage said Amber continued to see strong traction in electronics and a gradual improvement in the mobility segment, while deeper backward integration and recent acquisitions were strengthening capabilities and margins in the electronics business.

Nuvama said it had factored in the recent acquisition and raw material cost inflation, leading to a 6 per cent cut in FY26 EPS and a 2 per cent cut in FY27 EPS, though this had no bearing on its positive medium-term outlook. It assigned 50 times to electronics and 42x to the consumer durables and mobility profit pools, noting that Amber was trading at about 45.3 times FY27 EPS.

In the consumer durables segment, Nuvama said Amber remained resilient despite a weak industry environment. Management guided for double-digit growth in FY26, versus expectations of flat industry growth, supported by customer additions, product-led upgrades and traction in commercial air conditioners. The brokerage flagged near-term margin risks from elevated copper prices, rupee depreciation and the shift to the new energy-rating regime from January 1, 2026, but said the medium-term growth outlook remained strong, with a 15–17 per cent CAGR driven by premiumisation, higher inverter penetration, expansion in commercial HVAC and greater OEM outsourcing.

On electronics, Nuvama said Amber reiterated its FY26E revenue growth guidance of 40–45 per cent at 8–9 per cent margins, with a longer-term ambition of reaching $1 billion revenue by FY29E and operating Ebitda margins of 11–13 per cent. Growth was expected to be driven by organic expansion in PCBA and PCB businesses and the integration of recent acquisitions, including Unitronics, Power One and Shogini. Management expected margins to improve over the medium term on the back of backward integration, synergies, product mix improvement and operating leverage.

For the mobility business, Nuvama said revenues were likely to remain broadly flat in the current year, but growth was expected to pick up from next year as the Vande Bharat and metro programmes began contributing meaningfully. Amber supplied HVAC systems, pantries, doors and gangways across rail platforms and was already the largest player in metro projects. Management expected mobility revenues to double by FY28 as supplies ramped up.