Subros Q2 Results Review - Trough Quarter, Recovery Ahead: Dolat Capital
We expect PVs demand to continue to be strong for the next two years led by recovery in the economy.
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Dolat Capital Report
Subros Ltd. displayed a weak performance in Q2 due to several headwinds like commodity inflation, sharp increase in fabrication cost and increase in logistics cost (high container and diesel cost).
Ebitda margin stood at 5.7% in Q2. Management expects margin to revive on the back of softening commodity prices, operating leverage, localisation and cost cutting measures. We expect sharp gross margin expansion due to fall in metal prices and logistics cost.
Despite weak performance in last many quarters, we maintain positive stance on Subros led by-
premiumisation and upbeat outlook for in passenger vehicles segment,
increase in content per vehicle due to electrification,
rapid acceleration of E-buses and new verticals (especially from home air conditioner, E-buses and railway) and
sharp margin expansion due to fall in raw material and logistics cost.
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