Small Cap Stock Surges 17% To New 52-Week High After Order From Railways

Small Cap Stock Surges 17% To New 52-Week High After Order From Railways

The company on Saturday announced securing a new contract valued at approximately ₹25 crores from Indian Railways. The contract pertains to the delivery and commissioning of coach roof-mounted air conditioners and was awarded as part of a recent tender.

www.benzinga.comUpdated: Monday, December 11, 2023, 04:43 PM IST
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Shares of Subros continued to make gains for the third straight session on Monday going up over 17% to hit a new 52-week high of ₹531.

What Happened: The company on Saturday announced securing a new contract valued at approximately ₹25 crores from Indian Railways. The contract pertains to the delivery and commissioning of coach roof-mounted air conditioners and was awarded as part of a recent tender.

This development aligns with the company’s strategic focus on expanding its presence in the railway electric mobility segment. In addition to coach air conditioners, the company is already a supplier of rail driver cabin air conditioning systems to Indian Railways.

Earlier this month, brokerage firm HDFC Securities picked the Suzuki-backed stock as its fundamental pick. The brokerage sees the stock surging up to ₹513 in a bull case scenario over the next 2-3 quarters. As per the firm, the Ministry of Road Transport and Highways’ mandate that requires the installation of air conditioning systems in the cabins of motor vehicles falling under categories N2 and N3 (trucks) is a positive trigger for the stock. This mandate applies to vehicles manufactured from Oct. 1, 2025. The mandate was officially notified on Sunday and also seems to be another reason for the stock’s massive surge today.

As per the brokerage, the automotive component manufacturer is currently in the advanced stages of negotiations with original equipment manufacturers (OEMs) and is actively analyzing the specifications for AC systems to be applied in compliance with this regulation for trucks in these categories.

Price Action: Subros’ share price was up 11.17% to trade at ₹500.65 in the early hours of trading on Monday.

(The article is published under a mutual content partnership arrangement between The Free Press Journal and Benzinga)

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