Anand Rathi Research has retained a 'buy' rating on Amber Enterprises and Blue Star and 'hold' for Voltas. For Amber Enterprises, the most preferred of the troika, Anand Rathi has set a long-term target price of Rs 1,631 per share, which has a 55 percent upside potential from the scrip's current market price of Rs 1,049 a share. Likewise, Blue Star has a long-term target price of Rs 1,147 per share.

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Based on the current market price of Rs 801, the stock could rise 43 percent during the next 12 months, as per the brokerage recommendation. Voltas' could potentially rise 10 percent in the long term to Rs 760 from the existing price of Rs 690 per share.

The brokerage firm says that OEMs or contract manufacturers specialising in room air conditioners are set to report stellar FY20 results after posting robust results in the first half. The companies, particularly Amber Enterprises, will benefit from the booming domestic demand and exports, it said in a research report last week.

"The room-AC category is also set for interesting times in the coming season: an expected pick-up in demand for 7-star ACs and several critical breakthroughs pertaining to reasonably priced solar-powered ACs, which Amber can offer to OEMs," the report said.

The brokerage expects Amber Enterprises to grow 33 percent in the second half of the current financial year, outperforming the average industry growth by 10-15 percentage points.

Analysts at Anand Rathi Research also said that the "outlook for Voltas and

Blue Star’s project business has further improved after a substantial increase in orders, with the bid pipeline continuing robust. Amber’s subsidiary, Sidwal Refrigeration, is also set to obtain orders in H2 FY20 after bagging a Rs 1.67 bn order from BEML for the Mumbai metro-rail. Another low-hanging fruit for Sidwal could be orders for the Pune metro-rail, which can be expected to be finalized in H2 FY20."

Analysts at Anand Rathi expect Amber Enterprise's reasonably priced

solar-powered AC to be an important technological breakthrough as the competition in inverters hots up.

While the brokerage cites unseasonal rains and protracted winters as temporary risks, it expects FY22e earnings of the companies to go up for Voltas, Blue Star and Amber.

"As we roll over our earnings to FY22, Amber remains our top pick in airconditioning with a target price of Rs 1,631 (earlier Rs 1,248 based on a sum-of parts model factoring in FY21e). We maintain our Buy rating on Blue Star with a target price of Rs 1,147 (earlier Rs 879 based on FY21e earnings). Also, we retain our Hold recommendation on Voltas, with a target price of Rs 760, as the recent run-up in the stock provides limited potential," the report said.

Voltas reported a consolidated net profit of Rs 107.28 crore in the second quarter, while revenue from operations came in at Rs 1421.94 crore.

On consolidated basis, Blue Star's net profit rose 94.1 percent to Rs 37.94 crore on a 21 percent jump in net sales to Rs 1,249.47 crore in Q2 September 2019 over Q2 September 2018.

Amber Enterprises reported a consolidated net profit at Rs 11.7 crore in the September quarter against a loss of Rs 2.6 crore in the same period last year. Consolidated revenue grew by 89 percent year-on-year to Rs 623.2 crore in Q2FY20.

Shares of Amber Enterprises have returned 13 percent so far this year. Blue Star has given over 28 percent return this year, while Voltas has surged over 22 percent year-to-date.

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First Published:Dec 11, 2019 1:57 PM IST