Amber Enterprises India Ltd

At Amber, our core focus is on contributing to nation building, while pursuing global competitiveness and operational efficiency by achieving excellence in cost, quality, responsiveness, compliance, governance, safety, innovation, and ESG practices. With manufacturing being our DNA, we are fully aligned with this transformative journey, playing a pivotal role through localisation and the backward integration of consumer durables, EMS and railway subsystems & defense.

Dear Stakeholders,

I am delighted to present our annual report for FY 2023- 24, a year marked by significant transformation for Amber Enterprises. While manufacturing room air conditioners has been our forte since our inception and we have continued to lead the industry after our listing in 2018, this year stands out for the substantial structural changes it has brought to our sector. We have strengthened our portfolio and market offerings through strategic diversifications into new growth segments such as electronics and mobility.

Over the period, Amber has evolved itself into a diversified B2B manufacturing company from a core RAC player. With inclusivity in diversity, we are scaling new horizons with three business verticals:

Our growth engine was fueled by strategic acquisitions and MoUs executed during the year, strengthening our position in consumer durables, EMS and railway subsystems. While Amber clings to leadership in the RAC segment, our journey in EMS and Mobility segment has evolved remarkably. Initially focused on providing PCBA solutions for inverter ACs, we diversified our offerings to include solutions for home appliances, consumer electronics, hearables and wearables, telecom, smart meters, and the automotive sector. Our capabilities were further fortified with entry into bare PCB manufacturing which positioned us to explore new opportunities in aerospace, defense, medical electronics, electric vehicles, mobile devices, and energy solutions. In the railway subsystem and defense divisions, we broadened our portfolio from HVAC solutions to doors, gangways, pantry systems, pantographs, couplers and other railway components. With manufacturing being our DNA, we are fully aligned with this transformative journey, playing a pivotal role through localisation and the backward integration of consumer durables, EMS and railway subsystems & defense.

CONSUMER DURABLES

From an agrarian economy to service economy and now transitioning towards a manufacturing hub we have emerged as one of the fastest-growing economies in the world. This growth coupled with rising household incomes, has resulted in increased consumer spending which is expected to reach US$ 4 Trillion by 2025. The per capita income, which today stands at US$ 2,600, is expected to be doubled by 2030. The rising disposable income coupled with such consumption and new market opportunities, presents us with room to scale our capacities and offer new-age, energy efficient solutions to meet the rising and changing demand of aspirational India.

Today, Amber is one of the most backward integrated and comprehensive solution providers in the segment of room air conditioners (RAC), RAC components and Non - RAC components. Over the years, this segment has distinguished itself from a luxury to necessity and its appetite for investment potential, driven by the growing demand for cooling solutions in households, construction, infrastructure, and hospitality. Government support, coupled with advancements like energy efficiency and Al integration, is further reshaping this industry. The recent PLI scheme acted as a catalyst in creation of a local component ecosystem for the air conditioning industry. The local value addition in the RAC sector, which was around 25% in 2021, today stands at more than 50% after this scheme and is expected to reach upto 75% by 2028. Further, the emphasis on green and sustainable construction has accelerated the adoption of energy efficient HVAC systems in green building projects, propelling market growth.

Moreover, the demand for commercial air conditioning is also on the rise and is projected to capture 30% of the market share, bolstered by demand from key sectors in Tier 1 & Tier 2 cities. As the country advances and prioritises sustainability, Amber is poised to play a crucial role in delivering comfortable, energy efficient and environmentally responsible solutions for a wide range of applications.

Further, leveraging our scale and expertise in Non-RAC components, we ventured into manufacturing of washing machines, strengthening our consumer division portfolio and expanding our footprints beyond RAC. We entered into a 50:50 JV with Resojet Pvt. Ltd, a leading ODM in fully automatic washing machines, enabling our entry into the manufacturing of fully automatic top and front- load washing machines. This accretion positions us to meet the rising demand for advanced washing machines and enhance our offerings in the domestic as well as for

ELECTRONICS

A journey which began in 2018 with an aim to address the transition underway in the RAC sector from fix-speed to inverter ACs soon made us realise that electronics sector is an ocean, and we were only at the shore. We gradually started expanding our offerings in PCBAs and soon transformed our electronics division as one of the market leaders in PCBA solutions for home appliances, consumer electronics, hearables & wearables, telecom and automotives. Favorable policies and schemes by government to create a local electronics component ecosystem; played a pivotal role in localisation of PCBAs in the country. However, PCBAs worth US$ 5.32 Billion are still imported, which presents us with an opportunity for substituting imports.

While we matured with our understanding of electronics, we decided to integrate backwards by looking forward to developing a local ecosystem of electronic components. In this direction, we acquired Ascent Circuits to manufacture bare PCBs. PCBs are the backbone of any electronic product and therefore it becomes crucial for us to reduce our dependence on imports and nurture a local ecosystem for the same. The PCB bare board market in India is growing at a CAGR of 11%. This year, the market for PCBs stood at ~US$ 4.5 Billion (85% of requirements were met through imports) and is expected to reach US$ 9.2 Billion by 2030, which presents us with a myriad of opportunities to capture the domestic market by substituting the imports.

We also entered an MoU with South Korea's ‘Korea Circuits', further bolstering our R&D and PCB manufacturing capabilities thereby solidifying our commitment to localise PCBs.

With Ascent and Korea Circuits in our fold, we will be able to offer various grades of PCBs viz. single layer, double layer, multi-layer, flex PCBs, HDI and semiconductor substrates thereby expanding our solutions in the segment of consumer electronics, medical devices, defence, aerospace, automobile (EV & ICE), mobile, smart energy, IT & telecom and many others.

The electronics hardware industry is progressing at a CAGR of 15% and is the world's largest and fastest growing industry which is increasingly finding its application in all sectors of the economy. Therefore, the localisation of electronic components becomes a determining factor for India to become a global hub for electronics.

RAILWAY SUBSYSTEMS AND DEFENSE

Another important sector which is shaping the mobility infrastructure of the country is modernisation of railways and the metro. The rail network in India is often considered the lifeline and backbone of connectivity, facilitating the transportation of goods from the hinterland to ports and cities, and sometimes vice versa.

India's railway sector is undergoing a monumental transformation through ambitious projects like introduction of 35 indigenously designed Vande Bharat Express trains, with six more set to launch soon. The redevelopment of 553 stations under the ‘Amrit Bharat Station Scheme, introduction of new RRTS trains amongst others. Parallelly, with the advent of 25 new smart cities, the new metro networks are set to expand substantially along with the current web of networks which is further expanding its connectivity.

All these developments place the railway subsystems division of Amber at an advantageous position. Our Joint Venture with Titagarh railway systems and Yujin Machinery of South Korea not only enhances our product portfolio in railway subsystems such as doors, gangways, pantry systems, driving gears, couplers and pantographs but also opens doors to go global. In an industry predominantly dominated by multinational corporations these JVs will advance the objectives of self-reliance and domestic capacity building.

Further, our investment in Firema, Italy will leverage to establish new railway components business dedicated to exports in the Europe and rest of the world, expanding our global footprint going forward.

These developments place Amber in a unique position to increase its wallet share and BOM per passenger coach, which is in line with our strategy.

Further our defense segment is gaining momentum, and the order books are strengthening. We are adding more products in our defense segment and will endeavor to evolve as a significant contributor to the sector.

At Amber, our core focus is on contributing to nation- building, while pursuing global competitiveness and operational efficiency. We are grateful for the conducive policy environment created by the Government and are committed to seizing opportunities for expansion and innovation. Our vision is to not only be the primary option but the preferred choice for our customers, by achieving excellence in cost, quality, responsiveness, compliance, governance, safety, innovation, and ESG practices. We are firm in our dedication to pursue continuous improvement and leadership in our chosen sectors, ensuring sustainable growth and value creation for all stakeholders.

NOTE OF THANKS

I extend my heartfelt gratitude to my entire team for their hard work and dedication in creating value for our stakeholders. Teamwork at Amber is behind Amber's growth story and every team member is a vital part of the Amber family. Your commitment to excellence remains the driving force behind our success. Together, we have achieved significant milestones and faced challenges with resilience. Your invaluable contributions have played a pivotal role in our collective growth.

I am thankful for the unceasing support from our shareholders, vendors, bankers and FIs. Your faith in us makes us who we are, and we look forward to your continued support as we march ahead in pursuit of making a better tomorrow.