Multibagger small cap jumps another 10% to hit record high, gains 45% in just 7 sessions. Do you own it?

Subros share price in focus: Despite the Indian stock market trading in a narrow range during Tuesday's session, Subros, an automotive air-conditioning solutions provider, saw its stock price jump another 10% to cross the ₹1,000 mark for the first time, hitting a fresh all-time high of ₹1,083.20 apiece. Today’s rally added to the stock’s 19% jump in the previous session, taking its 7-day cumulative gain to 45%.

Investor enthusiasm was sparked by the implementation of a mandate requiring that, starting June 8, all medium—and heavy-duty trucks manufactured and sold in India feature factory-fitted air-conditioned cabins. This mandate, announced about 18 months ago, aims to enhance driver comfort, reduce fatigue, and improve safety on long-haul routes.

To comply with the regulation, truck makers like Tata Motors and Ashok Leyland are rolling out updated models and have raised prices by 1–2.5% to absorb the additional cost of AC systems.

Subros is a leading player in vehicle air conditioning, holding over 40% of the passenger vehicle market and more than 54% of the commercial vehicle segment. This leadership position explains why the stock has been soaring on the exchanges.

Earlier, analysts noted that mandatory AC cabins for trucks would expand the company’s addressable market, helping to further increase non-passenger vehicle (non-PV) revenue for Subros, and could create a market opportunity of ₹400–450 crore by FY26.

The company is also expanding into the home air conditioner segment, in addition to its existing presence in the railway segment. Analysts further project that the rising demand for electric vehicles in India will serve as another growth catalyst for the company.

Meanwhile, truck sales declined to 307,491 units in FY25 from 320,244 units the previous year, according to the Society of Indian Automobile Manufacturers. The drop was attributed to a high base of the previous years and a temporary slowdown in infrastructure activity due to the general elections in the first quarter of the fiscal year.

However, industry experts believe that the sales will pick up momentum in the ongoing fiscal year on the potential rebound in the economic activity.

Wealth Creator

From a trading price of ₹50 apiece ten years ago, the stock has seen a remarkable rise of 1954% to trade at the current level of ₹1027. To put this into perspective, if an investor had invested ₹one lakh into these shares a decade ago and held onto them until today, their investment would have ballooned to an astonishing ₹20.54 lakh.

Over the last ten years, it concluded seven years with gains. The standout year was CY14, when it delivered a remarkable return of 140%. This was followed by robust returns of 90% in CY17 and 81% in CY23. In the current year, it has already gained 66%.

Founded in 1985 as a joint venture between the Suri family of India, DENSO Corporation, and Suzuki Motor Corporation, the company is a leading manufacturer of thermal products for automotive applications in India. It is the only integrated manufacturing unit in India for auto-air conditioning system products.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.