Subros Limited , India's largest automotive air conditioning and thermal products manufacturer, has announced its unaudited financial results for the first quarter. The company reported significant year-on-year growth in revenue and profitability.

Financial Highlights

All financial figures in Rs. crore, except EPS in Rs.

Operational Performance

Subros Limited attributed its growth to several factors:

• Increase in sales volume across segments
• Start of production (SOP) for new projects, including Railways business
• Improved material cost due to cost optimization initiatives
• Positive impact from foreign exchange management and investment income

Segment-wise Performance

The company reported strong growth in its core business areas:

• Passenger Vehicle (PV) Segment: Thermal business growth of 19%
• Commercial Vehicle (CV) Segment: SOP of Truck Aircon and one Electric Vehicle (EV) project
• Railways: Contribution to revenue growth from new business in this segment

Management Strategy

The financial results presentation highlighted several key aspects of Subros Limited's performance and strategy:

• Focus on business expansion in the Commercial Vehicle segment, including bus, rail, and truck
• Emphasis on green mobility solutions, including Electric Vehicles (EV), Strong Hybrid Electric Vehicles (SHEV), and CNG vehicles
• Ongoing technology upgrades to meet regulatory changes such as BSVI, RDE, and CAFÉ norms
• Commitment to cost optimization through improvement in operational efficiencies
• Continued focus on ESG goals to meet future sustainability and social requirements

Future Outlook

Subros Limited's investor presentation outlined several areas for future growth and operational improvements:

• Aligning company growth with industry growth across all segments
• Realizing business opportunities in green mobility
• Mitigating foreign exchange impact through hedging and aggressive localization
• Enhancing human skill development and organizational structure to meet future requirements
• Expanding capacity through internal efficiency optimization and expansion plans

The company's focus on diversification into multiple segments, including railways and commercial vehicles, along with its emphasis on green mobility solutions, positions it well for future growth in the evolving automotive and transportation sectors.

Subros Limited continues to maintain its position as a leading player in the automotive air conditioning and thermal products industry, with a strong focus on innovation, cost optimization, and sustainable growth strategies.

Subros Limited , a prominent player in the automotive components sector, has recently found itself in the crosshairs of the customs department, facing a substantial demand of approximately Rs. 35.08 crores. The company has announced its intention to appeal against this order, maintaining that it will not materially impact its financial position or operations.

Details of the Customs Demand

The Principal Commissioner of Customs, Greater Noida, has issued an order confirming demands against Subros Limited, which break down as follows:

Allegations by the Customs Department

The customs department has raised two primary issues:

1. Incorrect Benefit Availment: An allegation of incorrectly availing benefits under a specific notification, amounting to Rs. 4.83 crores.
2. Misclassification of Components: A claim of misclassification regarding two components, totaling Rs. 11.71 crores.

Subros Limited's Response

In response to this demand, Subros Limited has stated its intention to file an appeal with the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The company appears confident in its position, with its statement noting:

"Based on the Company's and legal counsel assessment, the Company reasonably expects a favorable outcome at the Appellate stage."

Financial Impact

Despite the significant amount involved in the customs demand, Subros Limited has assured stakeholders that there is no material impact on its financials, operations, or other activities. This statement suggests that the company is well-prepared to handle the financial implications of this case, regardless of the outcome.

Looking Ahead

As the situation unfolds, stakeholders will be keenly watching the appeal process and its potential implications for Subros Limited. The company's confident stance and immediate plan to appeal indicate a strong belief in its position. However, the final resolution of this matter may take some time as it progresses through the appellate process.

Subros Limited's handling of this customs demand and the subsequent legal proceedings will be crucial in maintaining investor confidence and demonstrating its commitment to regulatory compliance in the automotive components sector.