For Q2FY2019, Amber Enterprises (Amber) posted a 15% yoy fall in sales volumes owing to unseasonal rains in April & May which resulted in inventory build up across brands. The company is expecting a recovery in demand in H2 and has maintained the guidance of 2.1 mn volume sales in FY2019, a 10% yoy growth.
Outlook and Valuation: We have largely 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 ~27%/50% in consolidated revenue/earnings over FY18-20E. The recent correction provides a good entry point for long term investors. We maintain BUY with a target price of `1135 (25x FY2020E EPS).
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