Subros Ltd

- Subros plans an investment of INR 150 crores for the Kharkhoda project. - The company intends to fund 75% of this through term loan borrowings, approximately INR 112 crores. - As of now, no loans have been taken, but the company aims to avail term loans up to INR 112 crores during the financial year. - The remaining capex will be funded from internal accruals. - No mention of any equity fundraising during the call. - Focus remains on using internal cash and debt for expansion and capacity increase.

- Subros is undertaking a key strategic project at the Kharkhoda plant for capacity expansion and automation. - The Board has approved an investment proposal for this project. - Land acquisition for Kharkhoda plant is completed and construction is underway. - Planned capex for the Kharkhoda project is INR 150 crores. - The company intends to finance approximately 75% of the Kharkhoda investment (around INR 112 crores) through term loans during the financial year, with the remainder from internal accruals. - Besides Kharkhoda, there is no mention of other specific capex plans but overall capex including Kharkhoda and routine investments could be about INR 270 crores for the year. - The Kharkhoda plant is expected to start production by Q1 of the next fiscal year.

- Subros expects overall industry growth for FY '26 to be muted, around 1% to 3%, but aims to outperform the industry growth significantly. - Growth drivers include increased AC penetration, especially mandatory AC in N2, N3 category trucks from October 2025. - The company targets more than 50% market share in the truck AC segment, with expected steep ramp-up post-October 2025. - EV bus segment is promising with almost 100% AC penetration expected due to battery cooling needs; large OEM tenders secured. - Content per vehicle expected to increase 1-2% in EV passenger vehicles (excluding electric compressors), with further growth with compressor localization when volumes justify. - In commercial vehicle and bus segment, 50-60% growth expected from current levels by FY '27. - Planned capacity and geographical expansion through the Kharkhoda plant will support growth. - Alternative fuel segment (CNG, hybrid, EV) currently contributes ~20% of revenue, targeted for growth.

- Subros expects to continue revenue growth outperforming industry, targeting 1%-3% industry growth but expecting better company growth driven by increasing AC penetration, especially in trucks from Oct 2025 regulation. - Margin improvement efforts are ongoing with a long-term target of 12%+ EBITDA margin, recently crossed 10.22% annual margin; FY '27 is indicated as a potential timeline to reach 12%. - New segments such as truck AC (N2, N3 category) with over 50% market share target and railway segments are expected to drive future growth. - EV and green mobility products currently contribute ~20% of revenue, with plans to expand HVAC and associated products aiding growth. - Capex of INR 150 crores plus ongoing investments are expected to support expansion and automation, especially in the new Kharkhoda plant. - Overall profitability showed strong improvement: 36.49% Q4 and 44.61% annual profit before tax growth YoY, reflecting operational efficiencies and localization.

- Subros has secured almost INR 150 crores worth of orders in the truck AC (N2, N3 category) segment. - They anticipate maintaining more than 50% market share in this segment going forward. - For the railway segment, Subros has an order book of around INR 40 crores in tenders; INR 17 crores delivered and INR 23 crores expected to be delivered in the first 3 quarters. - Large tenders for EV buses have already been agreed with major OEMs; preparing for initial product introduction and battery cooling solutions. - The bus AC segment overall market size is about INR 400 crores to 450 crores; expecting to capture a significant market share. - The Kharkhoda plant project has a capex of INR 150 crores with ongoing construction; planned SOP next year Q1. - Half-year impact for CV business in FY '26 due to midyear SOP; full growth expected in FY '27.