Subros shares surge 13% on Rs 25-crore order from Indian Railways

Shares of Subros surged 13 percent on December 11 after the company bagged a contract worth about Rs 25 crore from the Indian Railways for the delivery and commissioning of coach roof-mounted air-conditioners in a recently concluded tender. The company is a supplier of rail driver cabin air-conditioning systems to the railways.

At 9:33am, Subros shares were trading 13.5 percent higher at Rs 511.50 on the National Stock Exchange (NSE). The small-cap company in the consumer discretionary sector has a market capitalization of around Rs 3,300 crore.

Coach air-conditioners are in accordance with Subros’ strategy to expand its business in the railway electric mobility segment, the company said in its regulatory filing.

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Subros founded as a joint venture with the Suri family of India, DENSO Corporation and Suzuki Motor Corporation, Japan, is a manufacturer of thermal products for automotive applications in India, in technical collaboration with DENSO Corporation, Japan.

It manufactures compressors, condensers, heat exchangers, and all connecting elements required to complete AC loop and caters to all segments such as passenger vehicles, buses, trucks, refrigeration, transport and railways.

For the quarter ended September, the company reported a consolidated net profit of Rs 9.73 crore, up 175.03 percent from Rs. 26.76 crore in the previous quarter. It reported net sales of Rs 813.37 crore in the quarter under review, up 17.02 percent from Rs 695.04 crore in September 2022.

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The Subros stock has rallied 66 percent so far in 2023. HDFC Securities has a ‘buy’ call on the stock with a target price of Rs 469. Investors can buy the stock in the price band of Rs 427-435 and add on dips to Rs 377-385 band for a base case fair value of Rs 469 and bull case fair value is Rs 513 in the next two quarters, the brokerage said in an earlier report.

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