Subros Ltd

- 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.

- 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.

- 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.

- 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.

- 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.