Company Overview: Subros Limited, established in 1985, is a leading manufacturer of thermal products for automotive applications in India. The company operates multiple manufacturing plants across India and boasts a robust R&D center in Noida, developed in collaboration with Denso Corporation of Japan.
Ownership: Indian promoters: 36.79% Denso Corporation, Japan: 20% Suzuki Motor Corporation, Japan: 11.96%
Manufacturing Capabilities: Six manufacturing plants in India Annual capacity: 1.5 million AC kits
Q1 FY25 Results Update: Revenue: Increased by 16.8% y/y to INR 809.8 crore, driven by higher volumes and a new SOP launch. EBITDA: Increased by 65% y/y to INR 80.4 crore. EBITDA Margin: Expanded by 190bps y/y to 9.96% due to softening commodity prices. PAT: Increased by 159% y/y to INR 34.9 crore.
Growth Drivers: Content Localization: Achieved 85% localization, aiming for 90% over the next three years. Aims to reduce risks from exchange rate volatility and logistics disruptions.
Mandatory Air-Conditioned Cabins in Trucks: New regulation mandates AC cabins in trucks from October 1. Subros is positioned as a key beneficiary, with advanced discussions with OEMs.
Increasing Penetration in EV Buses: Government plans to boost EV bus penetration. Subros has developed kits for EV buses, offering higher revenue potential compared to ICE buses.
Strong Future Outlook: The management is optimistic about sustaining double-digit growth, barring any significant external disruptions. The penetration of air conditioners in trucks is expected to improve significantly from the current 15-17%. The company's strong localization strategy will support its profile over the next few quarters.
Technical Analysis: The provided chart shows that Subros Ltd. is currently trading near resistance levels after a recent breakout. Here are some key observations:
Resistance Level: The stock has faced resistance around the INR 800-820 range. Volume: Trading volume has been steady, with some spikes on upward moves, indicating interest at these levels. Trend: The stock is in an uptrend, supported by key moving averages
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