Subros is at the forefront of the companies which will benefit from the rules of making AC mandatory in trucks. But, seeing the rise in this stock this year, it seems that its performance may be normal. In 2025, Subros shares ran around 45 per cent. During this period, the return of Sensex was 4.33 percent and Nifty’s 5.77 percent. Subrose AC is already being used in trucks before government trucks make AC mandatory for cabins.
Revenue growth 8.5 percent in June quarter
Subros’s revenue rose 8.5 percent in the June quarter. Subros holds 42 per cent stake in the passenger vehicle market. It also has a good stake in the commercial vehicle segment. The replacement demand for the old fleet in the new OEM orders has a good share. It is positive for Subros. The management of the company has said that the company’s revenue from the truck segment is expected to increase by 32 per cent to Rs 165 crore from the truck segment on a year -on -year basis.
Now eyes on electric vehicles
Subros’s eyes are now on the electric vehicle market. It has started production for EV models of Maruti and Mahindra & Mahindra. The company is interacting with Hyundai/Kiya with Tata Motors. Currently, Green Mobility accounts for 20 per cent of the company’s sales. Management attempt is to increase this stake. EV’s use is expected to increase per vehicle (CPV) per vehicle (CPV) as compared to ICE vehicle. For example, the technology of e-capacity alone can be expensive by 3 to 4 times as compared to ICE.
Sale of ice vehicles will increase due to reduction in GST
Currently, Subros can import e-compete from Denso Corp in view of EV’s low volume in India. Denso is one of the company’s investors. Even if the compressor is removed, the company is expected to increase CPV by 20-30 percent for EV. It is worth noting that Ice vehicles have become cheaper due to decrease in GST rates. This may make the pace of sale of electric vehicles dull for some time.
The company’s new plant will increase production capacity
To meet the increasing demand, Subros is setting up a new plant in Kharkhoda. Initially it will have a capacity of 5 lakh units, which can be increased to 10 lakhs later. The plant is expected to be ready by the first quarter of the next financial year. The company also imports some high value, high components from Denso. Subros will have to increase the focus on localization to increase growth. The company wants to reduce the import to less than 10 per cent in the next 3-5 years.
Should you book profit?
Subros shares have become double since the announcement of making AC mandatory for commercial vehicles in December 2023. Currently, it is trading at 28 times the estimated Earnings of FY27. This means that the possibilities of growth have already affected the company’s shares. Investors can make profits in Subros shares.