Concall AI

Subros Limited — Q4 FY25 earnings call

Call held 23 May 2025

Management summary

Subros delivered a strong Q4 and full FY25 performance, outperforming the automotive industry with robust revenue and significant profitability improvements driven by operational efficiencies and localization efforts. Key growth drivers include the upcoming AC cabin mandate for trucks, increasing EV penetration, and expansion in the railway segment. The company is investing in capacity expansion, notably the Kharkhoda plant, and remains committed to its long-term margin targets.

Highlights

Q4 FY25 Revenue from operations was INR 908 crores, a 9.25% YoY growth.
FY25 Annual Revenue reached INR 3,368 crores, growing 9.67% YoY.
Q4 FY25 EBITDA stood at INR 99.22 crores (10.96% of net sales), up 22.72% YoY.
FY25 Annual EBITDA was INR 343 crores (10.22% of revenue), a 22.61% YoY growth.
Q4 FY25 PAT was INR 46.19 crores (5.10% of net sales), increasing 50.57% YoY.
FY25 Annual PAT was INR 150.39 crores (4.48%), up 53.98% YoY.
The company has secured INR 150 crores worth of orders for the AC cabin mandate in N2/N3 trucks, targeting over 50% market share.
Green mobility products (EV, strong hybrid, CNG) now contribute almost 20% of total turnover.

Key financials

2 periods

Q4 FY25

Revenue
₹908 Cr
YoY +9.3%
EBITDA
₹99.22 Cr
YoY +22.7%
EBITDA Margin
11%
PAT
₹46.19 Cr
YoY +50.6%

FY25

Revenue
₹3,368 Cr
YoY +9.7%
EBITDA
₹343 Cr
YoY +22.6%
EBITDA Margin
10.2%
PAT
₹150.39 Cr
YoY +54%

What they filed

Q1 FY27: revenue up 17.5%, net profit up 2.4% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	828	821	908	878	880 +6%	948 +15%	1,050 +16%	1,032 +18%
Expenses	752	745	816	796	811	866	958	951
EBITDA	76	76	93	82	68 −11%	81 +7%	92 −1%	81 −1%
Margin	9%	9%	10%	9%	8%	9%	9%	8%
Other income	6	5	6	6	20	-2	8	6
Interest	2	3	3	2	2	3	2	3
Depreciation	32	32	34	31	31	32	31	29
Profit before tax	49	46	62	55	55 +12%	45 −2%	66 +6%	56 +2%
Tax rate	25%	28%	25%	25%	25%	22%	26%	26%
Net profit	36	33	46	41	41 +14%	35 +6%	49 +7%	42 +2%
EPS	5.58	5.05	7.08	6.26	6.25	5.33	7.56	6.36

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Passenger Vehicle AC
₹2,700 Cr Revenue (FY25)8% Growth (FY25)42% Market Share (Q4 FY25)
Engine Cooling Module (ECM)
₹480 Cr Revenue (FY25)
Truck AC
₹125 Cr Revenue (FY25)35% Growth (Q4 FY25)38% Growth (FY25)43% Market Share (Q4 FY25)
Bus AC
16% Market Share (Q4 FY25)
Railway
₹17 Cr Revenue (FY25)35% Growth (FY25)
Green Mobility (EV/Hybrid/CNG)
20% Revenue Contribution

Guidance & targets

Market Share

Truck AC Market Share (N2, N3 category) Market Share · coming year · High confidence >50%

And we will be crossing share of business in this particular segment more than 50% in coming year.

— MR. PARMOD K. DUGGAL

Profitability

EBITDA Margin Profitability · long-term · Medium confidence 12% plus

The timing is only issue. Unless there is a big disruption geopolitical or in supply chains, we are still very sure that we'll be able to realize that target.

— MR. PARMOD K. DUGGAL

Capex

Kharkhoda Project Investment Capex · High confidence INR 150 crores

So this segment, we have been pursuing for last almost 1.5 years to pursue for order booking in this segment. We have already booked almost orders worth INR150 crores.

— MR. PARMOD K. DUGGAL
Total Capex (FY25) Capex · FY25 · High confidence roughly INR 270 crores

So this year, our capex would be roughly INR270 crores: INR150 crores plus the INR100 crores, INR120 crores which we spend per year. Is that the right way of looking at it?

— MR. PARMOD K. DUGGAL

Capacity

Kharkhoda Plant Start of Production Capacity · FY26 Q1 · High confidence Q1 next year

Yes, we are on track on this project. So construction activities are in progress now. So we have a plan to start of production next year first quarter, so at this moment, everything is in place.

— MR. PARMOD K. DUGGAL

Revenue

CV and Bus Segment Revenue Growth Revenue · FY27 · Medium confidence around 50% to 60%

So I'm not confirming INR300 crores as a number, but of course, from the current level, it may be around 50% to 60% growth coming in.

— MR. PARMOD K. DUGGAL

Growth

Overall Company Growth Growth · FY26 · Medium confidence much better than industry

if market is growing between 1% to 3% overall, I think we will be doing much better than the industry growth.

— MR. PARMOD K. DUGGAL

Order Inflow

Railway Tender Business Order Inflow · High confidence INR 40 crores

So last year, we have done a railway business of around INR17 crores, which is not significant in terms of overall contribution to the revenue, but with respect to the orders in pipeline, we have almost around INR40 crores of tender business what we got.

— MR. PARMOD K. DUGGAL

Risks & concerns

Commercial Vehicle Segment Headwinds
medium

The commercial vehicle segment faced headwinds and recorded a slight decline due to financial constraints and uneven fleet demand.

Management acknowledged
Muted Industry Growth (FY26)
medium

The industry growth for FY26 is not expected to be as strong as earlier trends, with expectations of 1% to 3% growth.

Management acknowledged
Global Supply Chain Disruptions
medium

Many supply chain disruptions are happening across the globe, prompting aggressive localization efforts.

Management acknowledged
Compressor Localization Volume Requirement
medium

Compressor localization requires a minimum break-even point of 0.5 million EV vehicle capacity in India, which is not yet available.

Management acknowledged
Railway Business Consistency
low

Railway segment is tender-based, leading to inconsistent month-on-month business flow.

Management acknowledged

Areas of evasion (1)

specific numerical growth target for FY26 (only 'much better than industry')

Q&A highlights

3 direct

AC Cabin Mandate Market Share and Profitability Direct

So this segment, we have been pursuing for last almost 1.5 years to pursue for order booking in this segment. We have already booked almost orders worth INR150 crores. And we will be crossing share of business in this particular segment more than 50% in coming year. So from the margin perspective, they are more comparable as compared to the passenger vehicle overall business domain, so there is no differential as such...

Reveals specific order book value and market share target for a significant new regulatory-driven segment, confirming comparable margins to existing PV business.

Asked by Arjun Khanna

Kharkhoda Project Capex and Timeline Direct

Yes, we are on track on this project. So construction activities are in progress now. So we have a plan to start of production next year first quarter, so at this moment, everything is in place. So this year, our capex would be roughly INR270 crores: INR150 crores plus the INR100 crores, INR120 crores which we spend per year.

Provides clarity on the capex allocation for the new strategic plant and confirms the timeline for production start, indicating execution is on track.

Asked by Arjun Khanna

Working Capital Cycle and Debt for Kharkhoda Direct

Working capital cycle is higher because of the realignment of the credit terms with a customer. So earlier, we were taking payment with a shorter period. Now it has been restated for a normal credit period. That has resulted in an increase in the receivable of more than INR100 crores. ... So Kharkhoda investment is INR150 crores, which company intends to avail 75% through the term loan borrowings, which is INR112 crores. As of now, we have not taken any loan, but during the financial year, we company, we intend to go up to INR112 crores term loan.

Explains the reason for increased working capital (change in credit terms) and details the funding strategy for the Kharkhoda project, including the planned debt component.

Asked by Mihir Vora

3 min read 7 chapters

Detailed narrative

Strong Q4 and FY25 Financial Performance

Subros reported a robust Q4 FY25 with revenue of INR 908 crores, marking a 9.25% YoY growth. Annual revenue for FY25 reached INR 3,368 crores, up 9.67% YoY. Profitability saw significant improvement, with Q4 EBITDA at INR 99.22 crores (10.96% margin), a 22.72% YoY increase, and annual EBITDA at INR 343 crores (10.22% margin), up 22.61% YoY. PAT for Q4 grew 50.57% to INR 46.19 crores, and annual PAT surged 53.98% to INR 150.39 crores, driven by operational efficiencies and localization.

AC Cabin Mandate for Trucks: A Key Growth Driver

The upcoming mandate for AC cabins in N2 and N3 category trucks from October '25 is a significant opportunity. Subros has already secured orders worth INR 150 crores and aims for over 50% market share in this segment in the coming year. Management expects this segment to contribute substantially to revenue, with a potential 50-60% growth from current levels in FY27, and margins comparable to the passenger vehicle segment. The overall addressable market for this segment is estimated at INR 400-450 crores.

Kharkhoda Plant and Capex Plans

The Kharkhoda project is a key strategic initiative for capacity expansion and automation. The land acquisition is complete, and construction activities are in progress, with a planned start of production in Q1 FY26. The total investment for Kharkhoda is INR 150 crores. For FY25, the total capex is estimated at roughly INR 270 crores, including the Kharkhoda investment and the annual INR 100-120 crores. The Kharkhoda project will be 75% debt-funded (INR 112 crores), with the remainder from internal accruals.

Green Mobility and EV Strategy

Subros is actively expanding its product portfolio for electric and hybrid vehicles, with alternative fuel initiatives (CNG, hybrid, EV components) currently contributing almost 20% of total turnover. Content per vehicle in EVs is higher than ICE vehicles, with an expected 1-2% increase without the electric compressor, and over 2x with it. While focusing on ECM and HVAC for EVs, compressor localization requires a significant market volume of 0.5 million EV units in India, which is not yet available.

Segmental Performance and Market Share

In FY25, the PV AC segment generated roughly INR 2,700 crores, growing 8% against an industry growth of 4%, with a 42% market share in Q4. The truck AC and blower segment saw 35% growth in Q4 and 38% in FY25, reaching INR 125 crores in revenue, with a 43% market share. The railway segment, though small at INR 17 crores in FY25, has a pipeline of INR 40 crores in tender business, with INR 23 crores yet to be delivered.

Margin Improvement and Localization Focus

The company's EBITDA margin improved to 10.22% for FY25 and 10.96% for Q4 FY25, up from 8-8.75% in previous years. Management reiterated its long-term target of 12% plus margins, attributing improvements to internal efficiencies and localization efforts. The import content currently stands at 16-18% of total revenue, and Subros aims for more aggressive localization to mitigate global supply chain disruptions.

Working Capital and Industry Outlook

The working capital cycle has stretched due to a realignment of credit terms with a customer, resulting in over INR 100 crores increase in receivables. Management expects this to stabilize at similar levels going forward. While the overall automotive industry growth is projected to be muted at 1-3% for FY26, Subros anticipates outperforming the industry, leveraging its new business wins and increased AC penetration.

This is an AI-generated summary of a publicly available earnings call transcript.

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