Subros Ltd. on the Move: Key Breakout and Strong Growth Drivers!

9月4日

Stock: Subros Ltd.
NSE Symbol: SUBROS
Industry Group: Auto/Truck-Original Equipment
Market Cap: INR 4,900 crore
50-Day Avg. Volume: INR 16 crore
Buy Range: INR 777-816

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