Yesterday, shares of Subros Ltd closed at Rs 362.10. Today, it opened at Rs 381.35 and surged to Rs 434.50, up by 19.99%, setting a new 52-week high and being locked in the upper circuit. The company has a market capitalization of around Rs 2800 crores.
On June 19, 2023, Union Road Transport Minister Nitin Gadkari announced that he has approved a proposal to make ACs mandatory for all truck cabins from 2025, providing much relief to drivers who endure long hours on the road, spending nearly 11-12 hours in hot and uncomfortable cabins.
The tough working conditions and long hours on the road are often cited as key reasons for driver fatigue and accidents. Nitin Gadkari further stated that, on average, drivers operate vehicles in temperatures of 43 to 47 degrees. While high-end trucks manufactured by global players such as Volvo and Scania already come with air-conditioned cabins, Indian players lag behind. However, this move will be a turning point for Indian auto air conditioning product companies such as Subros Ltd.
Subros is engaged in the business of manufacturing and supplying auto air conditioning products for all major automakers in the passenger and commercial vehicle space. Subros is the largest air conditioning and thermal products company in India, with a market share of 40% and 51% in the passenger car AC and truck aircon/blower segments, respectively.
In FY22, 100% of the company’s revenue was from India. The revenue breakdown was as follows: AC supply in passenger vehicles consisted of 78%, commercial vehicles 4%, radiators 12%, and home ACs 5%.
The move from Union Road Transport Minister Nitin Gadkari will largely benefit Subros Ltd as it is the market leader in the segment. The company is also focusing on developing and launching EV and hybrid vehicle products.
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