Shares of Subros hit the 20-per cent upper circuit on Tuesday after the Minister for Road Transport and Highways Nitin Gadkari said air-conditioned cabins for trucks will soon be made mandatory. The stock closed at ₹434.10, its 52-week high. Amber Enterprises India shares, too, surged on Tuesday. The stock of Amber Enterprises, a prominent solution provider for heating, ventilation and air conditioning (HVAC), jumped 7.84 per cent at ₹2,271 on the BSE. During the day, it hit a high of ₹2,383.95.
A PTI report quoting Gadkari said as drivers play a key role in the transport sector, which is one of the most important areas for India as the fastest-growing large economy in the world, there is a need to address issues regarding their working conditions and state of mind.
“Some people objected to it saying it will increase costs...but before coming here I have signed on the file that henceforth, driver cabins in trucks will be air-conditioned,” Gadkari said.
Biggest beneficiary
According to analysts, Subros will be the biggest beneficiary of the move, as it provides a complete range of truck cabin AC Systems.
Ravi Singhal, CEO, GCL Broking, said making air-conditioning compulsory in every truck cabin helped the stock climb sharply on Tuesday. “The top line as well as the bottom line can show a 12 per cent extra growth,” he said.
According to him, Subros has become one of the most preferred stocks in the auto ancillary space, as it maintains margins at higher levels.
Robust jump
Revenue from operations for the quarter ended March 2023 rose 9.8 per cent year on year at ₹748.1 crore against ₹681.10 crore reported in the same period a year ago. Adjusted PAT increased to ₹18.64 crore (₹16.7 crore). For FY23, it posted a profit of ₹48.48 crore and revenues of ₹2,806.28 crore.
The stock climbed over 18 times from a low of ₹23-25 in June 2013, to the current level. Shares of Subros jumped about 42 per cent in 2023 so far.
Subros, founded in 1985 as a joint venture public limited company with 36.79 per cent ownership by Suri family of India, 20 per cent ownership by Denso Corporation, Japan, and 11.96 per cent ownership by Suzuki Motor Corporation, Japan.
Among the public, eight mutual funds hold 13.30 per cent (UTI Transportation Fund, Sundaram Small Cap Fund, Nippon India Small Cap Fund, DSP Small Cap Fund and Canara Robeco Small Cap Fund). Retail investors hold 8.16 per cent stake.
Meanwhile, other air-conditioner makers such as Johnson Controls (Hitachi Air-Conditioning India) and Blue Star, too, climbed 1.3 per cent at ₹1,103.20 and 3.6 per cent at ₹790.35 respectively, even as Voltas ended flat at ₹789.60.