Subros shares jump 20% to hit fresh 52-week high; here's why the stock is hitting upper circuit

Shares of Subros Ltd rose sharply in Wednesday's trade to hit their fresh one-year high levels. The stock today continued its upward march for the fourth consecutive session. It jumped 20 per cent to hit the upper price band of Rs 521.40 over its previous close of Rs 434.50. The scrip was last seen trading 11.58 per cent higher at Rs 484.80 today.

Subros is engaged in the manufacturing of auto air conditioning systems. The sharp gain in the share price came after Union Road Transport Minister Nitin Gadkari announced that all trucks would now need to have air-conditioned driver compartments starting 2025.

"I have signed the file that mandates air conditioning in truck driver compartments. We must ensure that people who drive the trucks are well taken of," Gadkari said.

Around 2.03 lakh shares changed hands today on BSE, which was way more than the two-week average volume of 11,000 shares. Turnover on the counter came at Rs 10.33 crore, commanding a market capitalisation (m-cap) of Rs 3,199.81 crore.

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"Fresh buying at current levels is not advised as the stock is considerably high. However, those who bought the stock earlier can hold for another 20 to 30 per cent higher upside levels in the coming months. One can add the stock on a decline towards Rs 430-450 levels which will make risk reward quite lucrative for a positional buy," said Gaurav Bissa, VP, InCred Equities.

The counter's 14-day relative strength index (RSI) came at 90.10. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 58.95. It has a price-to-book (P/B) value of 3.37.

The scrip has a one-year beta of 0.38, indicating low volatility.

Subros was founded in 1985 as a joint venture company with 36.79 per cent ownership by Suri family (India), 20 per cent ownership by Denso Corporation (Japan) and 11.96 per cent ownership by Suzuki Motor Corporation (Japan). The company manufacturers thermal products for automotive applications in India, in technical collaboration with Denso. It has manufacturing plants at Noida, Manesar, Pune, Chennai and Sanand with an annual capacity of 1.5 Million AC Kits per annum.

Meanwhile, Indian equity benchmarks rose in early deals today, extending their gains for the second session. The domestic indices were up led by gains in financials, banks, automobile and consumer stocks. The 30-share BSE Sensex climbed 261 points or 0.39 per cent to hit its all-time high of 63,588, while the broader NSE Nifty moved 58 points or 0.28 per cent higher to trade at 18,876, a tad below from its record peak of 18,888.