Auto ancillary stock in focus after securing order worth ₹52 Cr from Indian Railways

Synopsis:
Subros Ltd shares are in focus after the company secured a Rs. 52.18 crore HVAC maintenance order from Indian Railways, strengthening its presence in the railway services segment and boosting its cumulative railway order book to Rs. 86.35 crore.

The company is India’s largest Air Conditioning & Thermal Products manufacturer, holding a 42% market share in passenger car ACs and 54% in the truck aircon/blower segment is now in the focus after securing an order from Indian Railways.

With market capitalization of Rs. 5,721 cr, the shares of Subros Limited are currently trading at Rs. 878 per share, making a high of Rs. 895.70 in today’s market session, from its previous close of Rs. 876.60 per share.

About the order

Subros Limited has announced that it has secured a significant new order from Indian Railways, specifically from Banaras Locomotive Works (BLW), Varanasi. The order pertains to a Comprehensive Annual Maintenance Contract (CAMC) for Cab HVAC (Heating, Ventilation & Air Conditioning) units. The contract, valued at approximately Rs. 52.18 crore (Rs. 44.22 crore plus GST of Rs. 7.96 crore), was awarded through a recently concluded tender. 

This project will be executed over a period of three years, following the standard terms and conditions of Indian Railways. The contract has been awarded by a domestic entity, and there is no promoter or related-party involvement in the awarding body.

This development marks a strategic expansion for Subros, which has long been a trusted supplier of Rail Driver Cabin and Coach Air-Conditioning Systems to Indian Railways. With this new order, the company is strengthening its presence in the railway services and maintenance segment, complementing its existing role as a supplier of AC systems. Subros highlighted that the award reflects Indian Railways’ continued confidence in the company’s technical capabilities and product performance.

With this new contract, Subros’ cumulative order booking in the Railways segment for the current financial year has reached approximately Rs. 86.35 crore, covering both supply and maintenance orders. This expansion into service-based contracts is expected to enhance the company’s recurring revenue stream and further solidify its leadership position in thermal management solutions for automotive and rail applications.

About the company 

Subros Ltd is a leading Indian manufacturer of automotive thermal products, established in 1985 as a joint venture with the Suri family, DENSO Corporation, and Suzuki Motor Corporation. The company specializes in integrated auto air-conditioning systems, producing compressors, condensers, heat exchangers, and related components. 

The company reported steady year-on-year performance in Q2 FY26, with sales rising from Rs. 828 crore to Rs. 880 crore, an increase of about 6.3%. EBITDA declined from Rs. 76.5 crore to Rs. 68.5 crore, reflecting a 10.5% drop, while net profit improved from Rs. 36.4 crore to Rs. 40.7 crore, up roughly 11.8%. EPS also increased from Rs. 5.58 to Rs. 6.25, marking a gain of around 12%.

It maintains solid financial strength with a ROCE of 20% and ROE of 14.5%, supported by a very low debt-to-equity ratio of 0.02, making it virtually debt-free. The company also shows attractive valuation metrics with a PEG ratio of 0.55 and has delivered healthy profit growth of 21.5% CAGR over the past five years.

Written by Manideep Appana

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