Subros Limited, the leading manufacturer of thermal management systems for automotive applications, targets Rs 1750 crore revenue in the next financial year as most of its business verticals are set to perform well in 2016-17. Last year, the company grew 11% to Rs 1479 crore, much above the industry average growth rate of 7.24% (growth rate of passenger vehicles), as per the sales data released by SIAM.

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Pawan Sabharwal, Director, Marketing, Subros, said, “We are anticipating good demand from Renault-Nissan Alliance which we have recently ventured into. We are supplying compressors to the recently-unveiled cars, Datsun redi-GO and Kwid. The proposed new launches of Maruti Suzuki and Mahindra & Mahindra will also generate demand for the company’s products in the coming year. Apart from the OEM business, we would also be manufacturing radiators for Denso which will ultimately be supplied to Maruti Suzuki which can contribute around Rs 150-200 crore to the total target.”

Subros will focus more on aftermarket in the coming years. So far the company treated aftermarket business only as a support system for OEM business. But with 90 dealers across the country, the company aims at 5% contribution from aftermarket to the total business. Subros will invest Rs 60-70 crore as capital expenditure for capacity enhancement. It is expanding its Sanand plant to supply to Maruti Suzuki in Gujarat.

Pawan Sabharwal, Director, Marketing, Subros

Pawan Sabharwal, Director, Marketing, Subros

Subros sees good demand coming from the commercial segment – Buses, Railway Cabin ACs and Refrigerated trucks. Despite the late entry to the commercial segment, the company has made inroads into the bus segment successfully. Subros is a supplier to Force Motors for its complete range of buses from Traveller to 26-seater bus. Sabharwal said, “Bus segment will grow reasonably well at the rate of 10% every year. It is evident from the Central Governments focus on infrastructure. If the government is successful in its plans and able to put the infrastructure development into reality, there will be a good scope for bus segment.”

New Opportunities

Subros is planning to launch in metro towns new concepts like `Shuttl’, an app-based, on-demand bus shuttle service. There are also new opportunities such as the State Government plan to have 200–300 air-conditioned ambulances for emergency service.

On the Railway business side, the company is manufacturing air-conditioners for driver cabins for diesel engines. The company won the contract to manufacture air-conditioner for 300 diesel locomotives which are built in Varanasi. One driver cabin of diesel engine requires 2 air-conditioners. Sabharwal said, “Earlier, the Indian Railway imported air-conditioners from the US for Rs 12 lakh. But, we made the same air-conditioner for Rs 4 lakh. Similarly, now we are talking for electric engine cabins which are manufactured at Chittaranjan Locomotive Works near Kolkata and also trying to enter coaches as well.”

On the refrigerated trucks front, Subros has not been able to move much. In the mean time, the company has set-up a plant in Greater Noida to manufacture the complete body of the truck along with the a-c kit to give a ready solution to retailers and cold chain suppliers. People used to get a chassis, source the AC kit from Thermoking or Carrier then get the body done from a body-builder. Despite the slow movement in the refrigerated truck segment the company is anticipating good demand in the coming years which would be fuelled by the entry of multinational large retail chains.

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Relationship with Denso

Subros has excellent and smooth relationship with Denso, its technological and equity partner (13%). Denso offers all the latest technologies to Subros which are viable in the Indian market. Apart from that, Subros also supplies some parts to Denso India. Sabharwal said, “We have clear understanding in terms of business. We do not approach foreign clients which are already doing business with Denso internationally. We do not interfere in the business, for example, they supply air-conditioner to Honda and Toyota from their Banglore plant whose name is Denso Kirloskar. Even for the other OEMS we first discuss with Denso before approaching them. We only deal with Maruti Suzuki, Tata Motors, Mahindra & Mahindra and now Renault-Nissan.”

Subros used to source the technology from Denso but since last 10-12 year, the company has built in-house R&D and capabilities to design, manufacture and test the product which is finally supplied to OEMs. But in some cases, the company takes help from Denso to deliver the best to its clients.

Subros Limited, founded in 1985 as a joint venture public limited company with 40% ownership by Suri family of India and 13% ownership by Denso Corporation & Suzuki Motor Corporation each. The company has grown from a capacity of 15,000 AC units in 1985, comprising largely assembly operations, into the largest integrated manufacturing unit in India for automotive air-conditioning systems.

Subros manufactures compressors, condensers, heat exchangers and all connecting elements required to complete the AC loop and caters to all segments viz. passenger vehicles, buses, trucks, refrigeration transport, off- roaders and Railways. The company has 2 manufacturing plants in Noida and 1 each in Manesar, Pune, Chennai and Sanand with an annual capacity of 1.5 million AC kits, besides a well equipped R&D Centre and tool room in Noida.


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