Detailed Rationale

Crisil Ratings has reaffirmed its ratings on the bank facilities of Amber Enterprises India Limited (AEIL) at ‘Crisil AA-/Positive/Crisil A1+’.

 

The ratings of Amber Enterprises India Limited were reaffirmed on 20th November 2025 while the outlook was revised to ‘Positive’ from ‘Stable’.

 

The reaffirmation of ratings factors in the recent announcement made by the group to acquire 80% stake in Shogini Technoarts Private Limited, a multilayer and flexible PCB manufacturing entity, for Rs. 506 crores. Post this acquisition, Amber Group, aimed at strengthening its in-house PCB production expertise and reducing its reliance on external suppliers and is also expected to broaden Amber's product offerings with advanced PCB.  Acquisition is undertaken from the liquid funds supported through recent equity capital raised. 

 

Rating reaffirmation also factors the sustained liquidity profile of the Amber group as it continues to maintain free cash and bank balances of around Rs. 1500 crores post the acquisition. Further, utilization of internal accruals and equity capital raised recently by the group, to fund the acquisition supports sustenance of its capital structure.

 

The reaffirmation in ratings reflects the improvement in group’s business risk profile, driven by diversification of product segment and customer profile leading to reduction in dependance on the consumer durable segment to the total revenue of the group. The diversification of revenue profile is  supported by the continued growth of the electronics and railway sub-system divisions. The rating also factors the sustenance of strong market position in the original equipment manufacturer (OEM)/original design manufacturer (ODM) space for the room air conditioner (RAC) segment; the Amber group had a market share of 26–27% in fiscal 2025 in the Indian RAC market. During fiscal 2025, the group achieved revenue of Rs 9,978 crore, as compared to Rs 6,730 crore in fiscal 2024, supported by an increase in volume and price growth. In the first half of the current fiscal, the group has generated revenue of Rs. 5,096 crores, which is expected to grow at a healthy scale to around Rs. 11,000–12,000 crores in fiscal 2026, supported by the strong market position of the group and synergies arising from the acquisition of Power One Micro Systems Private Limited and Unitronics (1989) (R”G) Ltd.

 

Over the two fiscals through 2025, the group has undertaken various acquisitions and has established multiple joint ventures (JVs) to achieve organic and inorganic growth; at the same time, the group has also amalgamated its two subsidiaries—ILJIN and Ever Electronics Pvt Ltd (EEPL)—for which it has received approval from the National Company Law Tribunal (NCLT) to increase the overall efficiency of the electronics division.

 

The operating margin of the company has also expanded to 8.09% in FY25, as compared to 7.70% in FY24, driven by the vertically integrated nature of operations and the transitioning of the business profile from a component manufacturer and supplier to a one-stop, full-fledged EMS solution provider. Over the last two years, the group has taken a cumulative price hike due to inflationary trends, which is reflected in the sustained margin; in the first half of the current fiscal, the group has generated an operating profitability margin of 6.55%, which is expected to improve to around 8–8.5% over the medium term because of the diversified revenue profile of the group and forward integration of operations of the group.

 

Crisil Ratings will continue to monitor the benefits arising from recent acquisitions along with the deployment of the funds raised, which is expected to further improve the business risk profile of the group over the near to medium term.

 

The ratings also factor in the group’s strong financial risk profile; the adjusted net worth was robust at Rs 2,310 crore as of March 31, 2025. The capital structure is healthy, with a gearing and total outside liabilities to adjusted net worth (TOLANW) ratio of 0.84 times and 2.64 times, respectively, as of March 31, 2025. Debt protection metrics were also comfortable, as reflected in an estimated interest coverage ratio of 3.87 times and a net cash accrual to adjusted debt (NCAAD) ratio of 0.25 times for fiscal 2025. Additionally, the group has raised equity capital of Rs. 2,750 crores in the current fiscal 2026; Rs. 1,000 crores have been raised by Amber Enterprises India Limited through a QIP round to fund the working capital requirements of the group, while an additional Rs. 1,750 crores have been raised in IL Jin Electronics India Private Limited by issuing compulsory convertible preference shares to private equity investors. Capital has been raised in IL Jin Electronics India Private Limited to fund recent acquisitions and capex planned in the near to medium term; the equity capital raised by the group will further enhance the financial risk profile of the group.

 

The ratings continue to reflect the Amber group’s established market position as a vendor for leading AC manufacturers, the group’s diversified customer base, high operating efficiency, and strong financial risk profile; these strengths are partially offset by exposure to risks related to seasonal business and the group’s large working capital requirement.

Analytical Approach

For arriving at the ratings, Crisil Ratings has combined the business and financial risk profiles of AEIL, Sidwal, PICL (India) Pvt Ltd (PICL), ILJIN, EEPL, AmberPR Technoplast India Pvt Ltd, Pravartaka Tooling Services Pvt Ltd (60% held by AEIL), Amber Enterprises USA Inc, Power One Micro Systems Private Limited, Appserve Appliance Pvt Ltd and Shogini Technoarts Private Limited, together referred to as the Amber group. Crisil Ratings has combined the business and financial risk profiles of AEIL with PICL and Sidwal as both are wholly owned subsidiaries and AEIL holds 90.22% each in EEPL and ILJIN. All these entities have significant business and operational synergies.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths 

Established market position and diversified clientele: The Amber group has a well diversified presence in three segments; consumer durables (RAC), electronics and railways & defense, contributing 73%, 22% and 5% respectively to the overall revenue of the group in fiscal 25. Group commands strong market position in the room air conditioner (AC). The Amber group has a healthy market share of 26–27% in the room air conditioner (RAC) segment and supplies to leading brands in the consumer durables space, which accounts for nearly 75% of the domestic refrigeration and RAC market. Under the electronics segment, the group manufacturers PCBs and PCBAs, critical in production of hi-tech electronics. Recent acquisitions are expected to result in sizable growth of the segment as the business profile of the group under the electronics segment will transition from component supplier to a final product manufacturer which is further expected to support the market position of the group going forward.  Railway segment is also expected to register strong growth, supported by introduction of new products leading to increasing the wallet share in railway coaches.  The group’s clientele is diversified, with the top five customers accounting for 38% of the revenue in fiscal 2025. The group’s product portfolio also includes components, and customers can leverage the relationship from a one-stop-shop perspective, reducing the overall cost of procurement for these customers. The group has a pan-India presence, with plants located near the customers’ manufacturing facilities, resulting in significant logistical benefits. This also ensures that the group remains a preferred supplier to the customer, with limited scope of the customer backing out of contracts.

 

The group has backward-integrated into the components segment through acquisitions over the last 10 years and has successfully integrated the operations of the acquired entities with its main operations, resulting in significant operational synergies and strong growth.

 

Healthy operating efficiency: Integrated operations, with in-house manufacturing of components (heat exchangers, multi-flow condensers, sheet metal components, and plastic mouldings, system tubing, printed circuit boards [PCBs], and electric motors) enhance operating efficiency. PCBs manufactured by the group involve high value addition and forms a critical component in production of various hi-tech industrial and consumer electronics.  Thus, the group’s operating margin was stable at 8.09% in fiscal 2025. In the first half of the current fiscal, the group has generated an operating margin of 6.55%, despite a weak season for RAC and refrigeration players, supported by a diversified product portfolio and customer profile. The recent acquisition of Power One Micro Systems Private Limited and Unitronics (1989) (R”G) Ltd. will result in forward integration of operations, especially in the PCB manufacturing and electronics segment. Through these acquisitions, the group will become a one-stop solution provider in the industrial electronics segment, which is expected to result in an expansion of operating margins to around 8.5% over the medium term. With the increase in value addition to the final product, the profitability of the group is expected to increase over the medium term.

 

High costs of raw materials and logistics continue to have an unfavorable impact on operating profit, but multiple price hikes and softening of commodity prices will mitigate the impact over the medium term. The sustenance of improved operating margins shall remain a key monitorable over the medium term.

 

Strong financial risk profile: The Amber group had a robust adjusted net worth of more than Rs 2,310 crore as of March 31, 2025. The group’s net worth is expected to improve further to around Rs 5,400 crores, as the group raised Rs 1,000 crores through a QIP round in Amber Enterprises India Limited to fund its additional working capital requirements, while an additional Rs 1,750 crores have been raised in IL Jin Electronics India Private Limited to fund the recent acquisition of Power One Micro Systems Private Limited and Unitronics (1989) (R”G) Ltd, along with planned capex to establish two new manufacturing units. In addition to the recent acquisitions, the group is expected to undertake a capex of around Rs 990 crores and Rs 1,200 crores to establish new facilities in Hosur, Tamil Nadu, and Jewar, Uttar Pradesh, over the next 2–3 fiscals. While the Rs 990-crore capex to establish a multilayer PCB manufacturing facility is expected to be completed by fiscal 2027, the Rs 1,200-crore capex to establish semiconductor substrate PCBs in Jewar is expected to be operationalized by fiscal 2028. These projects are expected to be funded partly through debt. Despite the planned debt-funded capex in the near term, the financial risk profile is expected to remain healthy, indicated by an expected gearing and TOL/TNW of 0.3–0.4 times and 1.1–1.2 times, respectively, by the end of fiscal 2026.

 

The financial risk profile of the company is expected to remain strong despite debt-funded capital expenditure (capex); however, any significant increase in debt will be critical and will be monitorable. Crisil Ratings also draws comfort from the strong articulation of the management to become a net debt free company by end of fiscal 27. The group also maintains a healthy cash and equivalent of Rs 454 crore and free bank deposits of Rs 787 crore, along with liquid investments of Rs 122 crore, as of September 30, 2025, providing a liquidity cushion. Debt protection metrics are also comfortable, as reflected in an interest coverage ratio of 3.87 times and a net cash accrual to adjusted debt (NCAAD) ratio of 0.25 times for fiscal 2025.

Key Rating Drivers - Weaknesses 

Exposure to risks related to seasonal business: Around 73% of the revenue in FY25 is derived from room air conditioners (RACs) and component segment and demand remains seasonal (from January to May), leading to revenue generation of over 60% in the last 2 quarter of the fiscal. Therefore the seasonal business leads to uneven cash flow during the year and affects liquidity and working capital management. However, the revenue growth and diversification in electronics (contributing around 22%) & railway segments (contributing around 5%) is expected to mitigate concentration of revenue generation and seasonality in cash flows over the medium term. Initiatives taken by the Government of India to curb the import of electronics through various tariff and non-tariff measures will create new windows of opportunities in the near future.

 

Large working capital requirement: Operations are working capital-intensive in nature, as reflected in inventory and receivables of 67 days and 66 days, respectively, as of March 31, 2025. Receivables are large owing to high sales in the fourth quarter of every year because of the seasonal nature of the business, as air conditioners (ACs) are purchased largely in summer, which spans from March to September of every year, depending on the region. Since the group has a strong customer base, there are no issues with receivables, and the group's size also supports this. The group has a purchase leverage and has gained bargaining power with suppliers, extending its payables, as reflected in moderate bank limit utilization of 5% on average during the 12 months through March 2025. Operations are expected to remain working capital-intensive. Gross current assets (GCAs) are expected to remain range-bound around 160–190 days over the medium term. The sustenance of the improved working capital cycle and continued low working capital debt will remain key rating sensitivity factors over the medium term.

Liquidity Superior

The group has a total unencumbered cash balance of Rs 454 crore and free bank deposits of Rs 787 crore along with investments of Rs 122 crore as on September 30, 2025. Annual net cash accrual of Rs 650-900 crore will be adequate against yearly debt obligation of Rs 190-300 crore. AEIL has a fund-based limit of Rs 2,320 crore, out of which only 5% was utilised on average during the 12 months through March 2025. The group maintained a current ratio of 1.22 time as on September 30, 2025.

Outlook Positive

Crisil Ratings believes that the diversification of revenue and end-user customer segments will further benefit the improvement in the business risk profile of Amber Enterprises India Limited.

Rating sensitivity factors

Upward factors:

• Sustained revenue profile  along with sustained earnings before interest, taxes, depreciation and amortisation (Ebitda) margin of around 8%
• Sustenance in the financial risk profile.

 

Downward factors:

• Decline in revenue by more than 20% and dip in the group’s Ebitda margin leading to significant decline in cash accrual
• Substantial debt-funded capex impacting the financial risk profile

About the Group

Incorporated in 1990, Rajpura-based AEIL started operations in 1992. It manufactures and assembles majorly RACs and key functional and reliable components, such as heat exchangers (coils), multi-flow condensers, sheet metal components, injection-moulding components, system tubing, inner case liners, washing machine tub assembly and other consumer durables. The manufacturing facilities are in Dehradun, Uttarakhand; Rajpura, Punjab; Jhajjar, Haryana; Greater Noida, Uttar Pradesh; and Pune, Maharashtra. In January 2018, AEIL came out with an initial public offering (IPO). Its shares are listed on the Bombay Stock Exchange and National Stock Exchange. Mr Jasbir Singh and Mr Daljit Singh are the promoters.

 

PICL, incorporated in 1994, manufactures AC motors at its unit in Faridabad, Haryana. AEIL acquired PICL in 2013.

 

In December 2017, AEIL acquired a 70% stake in Greater Noida-based ILJIN. In March 2018, AEIL acquired a 70% stake in EEPL. Both EEPL and ILJIN are engaged in manufacturing, assembling, dealing, importing and exporting electronic assembled PCBs for RACs and consumer durables and other segments. ILJIN has formed JVs with two companies: Korea Circuit Co Ltd and Noise (Nexxbase Marketing Pvt Ltd). The joint venture with Korea Circuit focuses on manufacturing PCBs. ILJIN holds 70% stake in the JV. The JV with Noise aims to boost the manufacturing of smart wearables in India in which IL Jin Electronics holds 50% stake.

 

AEIL acquired Sidwal in May 2019. Sidwal manufactures heating, ventilation, air conditioning and refrigeration equipment for mobile applications such as railway coaches, metro coaches, buses, automatic doors, gangways as well as commercial refrigeration and related components. AT Railway Sub Systems Pvt Ltd is a subsidiary of Sidwal Refrigeration, which is part of the Amber group, specialising in manufacturing couplers, driving gears and pantographs. AT Railway has a 55% stake in a JV with Yujin Machinery Ltd, focusing on designing, manufacturing and developing components for rolling stock. This JV will produce driving gears, couplers and pantographs with effect from September 2020. Sidwal is a wholly owned subsidiary of AEIL.

 

AmberPR Technoplast India Pvt Ltd (AmberPR), formerly known as Pasio India Pvt Ltd is a subsidiary of AEIL and manufactures cross flow fans and its plastic parts; fans and fan guard for outdoor units of RACs; plastic parts for water dispenser and refrigeration applications (other than automobile industry) and plastic parts for seats of trucks, tractors and buses. The business was acquired by AmberPR from Pee Aar, which is one of the leading cross flow fans manufacturer in India with other plastic components for various industries on slump sale basis in fiscal 2022.

 

Pravartaka Tooling Services Pvt Ltd (Pravartaka) manufactures injection mould tools and injection moulding components for various industries. The business was acquired by Pravartaka from Pioneer Tooling Services (Pioneer), which is one of the leading injection moulding tool and injection moulding component makers for consumer durables, automotive and electronics industries, on a slump sale basis in fiscal 2022.

 

Ascent Circuits Pvt Ltd (ACPL) manufactures PCBs and caters to a wide range of industries including aerospace and defence, medical, energy solutions, automotive, telecom, data centre, consumer electronics, IT and lighting.

 

Power One Micro Systems Private Limited is based in Bengaluru and manufactures UPS systems, solar inverters, power conditioning equipment and solar power plants. On August 05, 2025, ILJIN (material subsidiary of AEIL) acquired 60% stake in the equity share capital of the company and thus POMSPL has become a subsidiary of ILJIN and a step-down subsidiary of AEIL.

 

Amber Group has announced its financial results for quarter ending September 30th, 2025. The group has generated revenue of Rs. 1,647 crores in the quarter, while the operating profit and Profit After Tax stood at Rs. 84 crores and -Rs. 48 crores respectively.

Any other information: Not applicable