View Full Version : Subros Limited (NSE:SUBROS) (BSE:517168)

07-30-2015, 01:49 PM
Subros Limited is a manufacturer of thermal products for automotive applications in India. The Company manufactures compressors, heating, ventilation and air conditionings (HVACs), piping and heat exchangers to suit various vehicle configurations. The Company's product range spans across auto air-conditioning and engine cooling systems for passenger, as well as commercial vehicles. The Company provides a range of bus air conditioners and transport refrigeration solutions. The Company's air conditioners range from 4 kilowatt to 36 kilowatt capacity suitable for ambulances and buses of4 meters to 12 meters. The Company's transport refrigeration solutions are suitable for storage volume up to 50 cubic meters. The Company has developed import substitute for driver cabin air conditioning for diesel locomotives of railway engines.

Official website: www.subros.com

07-30-2015, 01:50 PM
Results miss estimates on lower than anticipated operating performance: Subros’ 1QFY2016 results were lower than expectations on the operating front. The company’s revenue for the quarter remained subdued, growing marginally by 3% yoy to Rs295cr (lower than our estimate of Rs309cr). Volumes grew by a robust 19% yoy, but the realization/kit dipped by 14% yoy, thus leading to a lower than anticipated top-line. Price cuts on account of depreciation of Japanese Yen and pricing pressures from key clientele Maruti Suzuki (which accounts for about 85% of revenues) have dented the realisation. Operating margins at 11.3% improved 90bp yoy largely on account of cost control initiatives, but the same were lower than our forecast of 12.6%. Given the miss on the operating side, the net profit at Rs4cr was lower than our estimate of Rs7.9 cr. Outlook and valuation: Subros’ top-line has been under pressure owing to lower realization on account of price cuts due to passing on the benefits of the weak Japanese Yen. Further increased competitive intensity and pricing pressures from Maruti Suzuki have also impacted the realisations. Although, the volume growth would remain healthy given the passenger vehicle industry recovery, the pressure on realization is likely to restrict revenue growth in our view. We estimate Subros’ revenues to record top-line and PAT growth of 6% and 9% respectively in FY2016. We have reduced our revenue as well as margin assumptions for FY2016/17 given the sluggish top-line. We downgrade our recommendation on the stock from Buy to Neutral.

Source: http://www.angelbroking.com