Are Subros latest results good or bad?

Subros reported its financial results for the quarter ending September 2025, revealing a mixed performance. The company achieved net sales of ₹879.83 crores, reflecting a year-on-year growth of 6.22%, which is an improvement from the previous year's growth rate. This growth in sales indicates that Subros continues to maintain a strong position in the automotive thermal products market, supported by its collaboration with Denso Corporation.
However, the operational metrics present challenges. The net profit for the quarter was ₹40.74 crores, marking an 11.86% increase year-on-year, yet this growth is significantly lower than the previous year's rate. Additionally, the operating profit before depreciation, interest, tax, and other income (PBDIT) declined to ₹68.47 crores, representing a notable decrease from the prior quarter. The operating margin, excluding other income, contracted to 7.78%, down from 9.34% in the previous quarter and 9.23% in the same quarter last year. This decline in margin highlights the pressures from rising raw material costs and competitive pricing dynamics within the automotive components sector.

The company's reliance on other income, which constituted a substantial portion of profit before tax, raises questions about the sustainability of its earnings quality. Employee costs have also risen, outpacing revenue growth, which adds to the operational challenges faced by Subros.

Overall, while Subros demonstrated resilience in revenue generation, the decline in operating margins and profitability metrics indicates significant operational challenges that need to be addressed. The company saw an adjustment in its evaluation, reflecting these mixed results and the ongoing pressures within the industry. Investors should monitor future performance closely, particularly regarding margin recovery and operational efficiency.