Khambatta Securities has given Buy recommendation for Subros with a target price of Rs. 416 in its research report issued on Feb 04, 2022

Khambatta Securities’ research report on Subros

Subros reported lower revenues in 3Q FY22 on a y-o-y basis (-9.3%) while 9M FY22 sales grew by a healthy 37%. 3Q FY22 EBITDA declined by 40% y-o-y owing to the sales de-growth as well as margin compression (-372 bps y-o-y) resulting from higher shipping, commodity, packaging and diesel costs, increased overheads, and changes in product mix. Employee costs have gone up on a y-o-y basis due to salary uplifts implemented in April 2021. PAT declined during the quarter, both in absolute and margin terms due to the decline at the EBITDA level.


During 3Q FY22, Subros won its first railway coach AC contract. The Subros stock has appreciated 48% since we initiated coverage with a BUY rating on 17 September 2020. Basis a strong launch pipeline and expectations of healthy growth at auto OEMs, led by Maruti, we reiterate a BUY rating with a price target of Rs 416 (at 27.0x FY24E EPS) and an upside of 15% from current levels.

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At 17:30 Subros was quoting at Rs 361.05, down Rs 1.00, or 0.28 percent.

It has touched an intraday high of Rs 365.60 and an intraday low of Rs 360.25.

It was trading with volumes of 1,173 shares, compared to its thirty day average of 2,871 shares, a decrease of -59.14 percent.

In the previous trading session, the share closed down 1.99 percent or Rs 7.35 at Rs 362.05.

The share touched its 52-week high Rs 418.00 and 52-week low Rs 283.40 on 25 October, 2021 and 20 April, 2021, respectively.

Currently, it is trading 13.64 percent below its 52-week high and 27.38 percent above its 52-week low.

Market capitalisation stands at Rs 2,355.34 crore.

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