The 7 reports from 4 analysts offering long term price targets
for Subros Ltd. have an average target of 315.50. The consensus estimate
represents an upside of 7.64%
from the last price of 293.10.
2Q FY21 revenues declined by 8% y-o-y, witnessing significant improvement from the 87% y-o-y decline in 1Q FY21. Consequently, 1H FY21 saw a degrowth of 50% y-o-y which is attributable to the COVID-19 outbreak/lockdown and its impact on business operations and demand. While 2Q FY21 EBITDA increased by 21% y-o-y, 1H FY21 EBITDA was down 76% on account of the operating loss recorded in 1Q FY21. PAT bounced back strongly in 1Q FY21 with a y-o-y growth of 34%....
We value the stock at 21x (in line with its average P/E multiple) and set a revised target price of Rs 310, based on Sep-22 EPS. Key risks: slower economic recovery in India, delayed scale-up in localisation levels. We upgrade Subros to BUY (ADD earlier) as the EBITDA margin surprised at 11.7% (vs 9.5% in FY20), led by higher localisation levels. The management highlights that the double-digit margin range is sustainable, driven by its cost-cutting initiatives and improving production levels. We believe that the parts supplier would benefit from a revival in passenger car volumes and the companys diversification initiatives. Subros is scaling up its presence in home ACs and railways segment (under the Make in India theme). We raise our FY22/23 estimates by ~19% to factor in improving margin outlook.
Subros reported an EBITDA loss of Rs 299mn due to the impact of negative operating leverage. Depreciation was lower by 10% YoY at Rs 193mn owing to single-shift working during the quarter. PBT loss was at Rs 529mn. However, the company recognised a deferred tax credit of Rs 289mn for previous losses, and hence the reported loss came in at Rs 240mn. While Subros reported a weak 1QFY21 (a loss of Rs 240mn), the outlook is encouraging as the company is currently operating at 75% of pre-COVID levels and production schedules from OEMs are increasing MoM. The company continues to benefit from new technology provided by Denso (vane rotary compressors and EV-based compressors). We reiterate our ADD rating on the stock Subros remains a proxy to improving car production (at Maruti) and we recommend investing in it on every correction (post the sharp rally from COVID level lows). 1QFY21 financials: Revenue declined by 87/84% YoY/QoQ to Rs 738mn (79% - car AC, 21% - others) due to an over 85% decline in car production.
Subros reported a decent performance in Q4FY20, despite several headwinds, including moderation in PV segment, impact of lockdown and input cost pressures. Revenue declined 11.5% YoY to Rs 4.5bn led by slowdown in PV segment and absence of revenue from the home AC segment. EBITDA margin contracted by 153bps YoY to 9.1% on account of negative operating leverage. The Company is the key player in the Automotive AC market and commands ~45% market share in PV segment. We expect the company...
We maintain our ADD rating on the stock. We believe that while Subros will benefit from a recovery in volumes at Maruti Suzuki- its largest customer (which accounts for over 3/4th of revenues), the diversification initiatives are delayed due to the COVID outbreak (home AC segment ramp-up is pushed back, CV and other segments will witness sluggish trends).
Subros Limited (Subros), Q3FY20 results were above our estimates at operating level. EBITDA margin stood at 10.4% vs our estimates of 8.5% on account of lower RM cost and lower operating expenses. Adj. PAT for the quarter stood at Rs135mn above our estimates of Rs113mn. We maintain our revenue/earnings CAGR of 4%/15% over FY19-22E with EBITDA margin of ~8% and average free cash flow of ~Rs1bn. We change our rating to ACCUMLATE (earlier BUY) due to recent increase in share price and...
Reiterate BUY on Subros given (1) Consistent increase in market share in PV-ACs (46%, +4% from FY19) despite a sluggish environment (2) Diversification into newer segments including home AC components (3) Deleveraging of balance sheet (Gross debt of Rs 1.9bn in 1HFY20 vs. Rs 3.2bn in FY18) and (4) Its strategic partnership with Denso will enable the transition to next generation products. 2QFY20 revenues (-12% YoY) were impacted by weak demand environment. Subros continues to gain market share in pass car ACs (currently at 46%) and is well positioned for any pick up in industry demand over FY21/22. We are lowering our estimates by ~5% to factor in the 2Q results. Maintain BUY with a revised TP of Rs 270 (at 17x Sep-21 EPS).
Subros is the largest automotive air conditioning systems company in India with >40% market share in the domestic passenger vehicle industry, supplying mainly to MSIL and other players like M&M;, TAMO and Renault Nissan. It also supplies air conditioning systems to commercial vehicles (MS -70%), railways (MS 77%), home AC, Engine Cooling Modules (ECM), buses and reefers. With strong demand in non PVs segment, Subros has been de-risking its business model by reducing its dependence on subdued PV segment as witnessed in Q1 FY20, where the...
Maintain BUY as (1) Subros has gained market share in the PV segment in a slowing market (up by 3%) (2) The co is diversifying into newer segments including home AC component supplies and expects the share of other segments to double to 40% in the medium term. (3) With Denso as its strategic partner, the co has relevant technology for next generation products In a sluggish market environment, Subros delivered ~8% YoY revenue growth driven by the ramp up in the home AC segment (post acquisition of Zamil in 4QFY19). Reiterate BUY with a revised TP of Rs 230 (at 15x FY21 EPS, 17x earlier). We are lowering earnings by 11% / 7% over FY20/21E to factor in lower margins. We reduce our multiple due to the slowdown in the pass car industry, which accounts for over 80% of its revenues.
During Q1FY20, Subros sales grew by 7.6 percent YoY to Rs5.7bn (above our estimates of Rs5.4bn). Decline in sales was driven primarily by subdued volume growth in Car and Non-Car segment.
Decent show amid tough environment, growth levers intact Subros 1QFY20, revenue beat estimate to ` 5.7bn (+7% YoY) led by wining new business (HVAC for new Wagon R and AC kit for Renault Nissan for Brazil facility) and incremental revenue from Home AC business (` 620mn). EBIDTA margin contracted by 111bpsYoY to 9.6 % on account of weaker product mix (low margin in home AC). Despite the slowdown in PVs segment Subros' core PV AC business managed to grew in single digit in 1Q led by shift in demand towards petrol variants plus rising wallet share...
Higher tax marred the Q4 PAT: For Q4FY19, Subros reported decline in Revenue/EBITDA by 6%/14%, YoY, impacted by auto industry slowdown. EBITDA margins declined by 92bps YoY due to higher raw material cost (due to change in product mix and currency appreciation) and other expenses. However lower depreciation and interest cost (due to debt repayment) and higher other income led to PBT growth of 7% YoY which got pulled down due to higher tax rate of 45%. Thus PAT declined by 13% YoY, due to absorption of carry forward of unabsorbed depreciation....
Improved market share in FY19 Despite the ongoing pain in the PV sales, Subros was able to increase its market share from 40% to 42% in the PV segment. The increased share was on account of new business from Maruti and M&M.; Client wise Subros market share stood at Maruti (74%), Tata motors (35%), M&M; 30%, Renualt 25% and Nissan 25%. The company expects its market share to improve further on...
We re-iterate BUY as (1) Subros has gained market share to 42% in a slowing market (up by 2%) (2) The company is deleveraging its balance sheet. They have already paid down Rs 1.2bn from the equity infusion by Denso (3) The share of passenger car AC's will reduce to 70% (from 80% currently) as the other segments (CV's, railways and home AC) ramps up. Subros reported a weak 4Q due to the ongoing sluggishness in the passenger car industry. However, we believe that the company is adopting an astute strategy by increasing its share of non passenger car AC business and deepening its relationship with its Japanese partner Denso. We re-iterate our BUY on the stock (TP of Rs 310) and we continue to value the stock at 17x on FY21 EPS.
Subros posted muted results in 4QFY19, as it was affected by the slowdown in the PV segment. Revenue/EBITDA declined 6/14% YoY, respectively. EBITDA margin was 10.6% (-92/-52bps YoY/QoQ), due to a weaker product mix and a negative operating leverage. The management has guided for a 5-7% growth in the PV AC business and an overall growth of 10-11% in FY20. The net debt reduced to ` 1.5bn in FY19, from ` 3.6bn...
Our recent plant visit to Subros at Manesar reinforces our confidence in the company,as its MD, Ms.Shradha Suri Marwah elaborated on the progress and growth potential of Subros' different businesses, key organizational changes and several other initiatives.
Maintain BUY with TP Rs 309(17xDec-20E EPS). The Subros management shared the future road map post the recent increase in stake by Denso to 20% (from 13% earlier). The focus of the Japanese parts maker will increase as Subros will now be an affiliate company. While the relationship scope will be confined to the thermal products domain, they will benefit from new product introductions.
