Any current/future capex/capital investment/strategic investment?

Subros has received formal board approval for a new Greenfield project at Kharkhoda, Haryana. Planned investment: Rs. 150 crores towards setting up a plant for Hoses, Tubes, and ECM with a capacity of 460,000 to 500,000 units. The new plant will focus on sustainability, automation, and digitalization. Expected operational commencement: April 2026. Funding: Approximately 25% from internal accruals and 75% via bank borrowing, subject to business conditions. There is ongoing feasibility work for setting up electric compressor manufacturing in India; estimated investment cost between Rs. 90 to 120

Any current/future new fundraising through debt or equity?

Subros Limited currently has no long-term debt and is managing its financing through internal accruals and working capital limits. For the new greenfield project at Kharkhoda (capacity addition of ~460,000 to 500,000 units) with an investment of Rs. 150 crores: - The funding mix is tentatively planned at 25% internal accruals and 75% bank borrowing. - However, the final mix will be adjusted based on business situation and requirements. No additional public mention of fundraising through equity or other means has been made in the latest call. The company is watchful of market conditions and

Future growth expectations in sales/revenue/volumes?

Exact revenue growth prediction is difficult due to market uncertainties. Capacity expansion aligns with customer requirements, notably Maruti's ramp-up plan. New capacities expected to be utilized 70%-80% within 1-2 years of project launch. Company anticipates performing slightly better than overall industry growth. Business segments like CV, truck, and last-mile connectivity trucks show promising growth. New plant with additional 460,000-500,000 capacity planned, operational by April 2026. Railways segment to see aggressive double-digit growth over next 2-3 years. EV bus aircon penetration e

Future growth expectations in earnings/operating earnings/profits/EPS?

Revenue growth prediction is challenging due to market uncertainties, but capacity expansion aligns with customer demand, especially Maruti's ramp-up. Capacity utilization expected between 70%-80% within 1-2 years post new project launch. Company expects to perform slightly better than the overall industry growth. EBITDA margins have improved consistently over the last 8-10 quarters and have reached double-digit levels; efforts will continue to sustain and improve margins. FY'25 and FY'26 outlook is promising considering current market conditions. Profit after tax (PAT) grew 36% in Q2 FY25; EB

Current/ Expected Orderbook/ Pending Orders?

Current railway order booking is approximately Rs. 35 to 40 crores. Of this, Rs. 10 to 12 crores will be executed in the current financial year; the balance will carry over to the next financial year. The company has won new business worth Rs. 120 crores in the recent quarter, with most SOPs planned for FY'26. MHCV truck aircon business is expected to generate additional revenues in the range of Rs. 160 to 175 crores per year post regulatory implementation in October 2025. The tractor radiator and aircon market is emerging, with growing OEM engagements. EV bus aircon orders are in evaluation a

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Subros LtdQ3 FY24Industrial Products

Subros Ltd Q3 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹825P/E: 29.0Market Cap: ₹4.9K CrSector: Industrial Products

Management growth scorecard

Revenue

Category 4

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 4

→Exact revenue growth prediction is difficult due to market uncertainties.
→Capacity expansion aligns with customer requirements, notably Maruti's ramp-up plan.
→New capacities expected to be utilized 70%-80% within 1-2 years of project launch.
→Company anticipates performing slightly better than overall industry growth.
→Business segments like CV, truck, and last-mile connectivity trucks show promising growth.
→New plant with additional 460,000-500,000 capacity planned, operational by April 2026.
→Railways segment to see aggressive double-digit growth over next 2-3 years.
→EV bus aircon penetration expected to improve within 6-8 months.
→Challenges in assuming EV market penetration growth; cautious investment in electric compressor capacity.
→Overall, FY'25 and FY'26 outlook is promising with focus on operational efficiencies and margin improvement.

Margin guidance

Category 3

→Revenue growth prediction is challenging due to market uncertainties, but capacity expansion aligns with customer demand, especially Maruti's ramp-up.
→Capacity utilization expected between 70%-80% within 1-2 years post new project launch.
→Company expects to perform slightly better than the overall industry growth.
→EBITDA margins have improved consistently over the last 8-10 quarters and have reached double-digit levels; efforts will continue to sustain and improve margins.
→FY'25 and FY'26 outlook is promising considering current market conditions.
→Profit after tax (PAT) grew 36% in Q2 FY25; EBITDA increased by 13%, with PBT up 16.8%.
→Capacity expansion investment of Rs. 150 crores planned to support growth.
→Focus on operational efficiencies and localization to improve profitability.
→Growth expected from emerging segments like CV aircon, last-mile trucks, and railways over next 2-3 years.

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Fundraise plans

Yes

→Subros Limited currently has no long-term debt and is managing its financing through internal accruals and working capital limits.
→For the new greenfield project at Kharkhoda (capacity addition of ~460,000 to 500,000 units) with an investment of Rs. 150 crores:
→ - The funding mix is tentatively planned at 25% internal accruals and 75% bank borrowing.
→ - However, the final mix will be adjusted based on business situation and requirements.
→No additional public mention of fundraising through equity or other means has been made in the latest call.
→The company is watchful of market conditions and will adjust funding approach accordingly.

Order book

Yes

→Current railway order booking is approximately Rs. 35 to 40 crores.
→Of this, Rs. 10 to 12 crores will be executed in the current financial year; the balance will carry over to the next financial year.
→The company has won new business worth Rs. 120 crores in the recent quarter, with most SOPs planned for FY'26.
→MHCV truck aircon business is expected to generate additional revenues in the range of Rs. 160 to 175 crores per year post regulatory implementation in October 2025.
→The tractor radiator and aircon market is emerging, with growing OEM engagements.
→EV bus aircon orders are in evaluation and prototyping, with ongoing efforts to penetrate further in the next 6 to 8 months.
→The company is watchful of market conditions before committing to large investments, especially in electric compressors and EV-related capacities.

Capex plans

Yes

→Subros has received formal board approval for a new Greenfield project at Kharkhoda, Haryana.
→Planned investment: Rs. 150 crores towards setting up a plant for Hoses, Tubes, and ECM with a capacity of 460,000 to 500,000 units.
→The new plant will focus on sustainability, automation, and digitalization.
→Expected operational commencement: April 2026.
→Funding: Approximately 25% from internal accruals and 75% via bank borrowing, subject to business conditions.
→There is ongoing feasibility work for setting up electric compressor manufacturing in India; estimated investment cost between Rs. 90 to 120 crores.
→Capex decisions on electric compressors are cautious, pending clearer EV market penetration.

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