Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Subros Limited (NSE: SUBROS) Q4 2026 Earnings Call dated May. 19, 2026
Corporate Participants:
Parmod Kumar Duggal — Executive Director and Chief Executive Officer
Mukul — Unidentified Participant
Analysts:
Annamalai Jayaraj — Analyst
Prakash Kapadia — Analyst
Arjun Khanna — Analyst
Mayur Parkeria — Analyst
Mihir Vora — Analyst
Unidentified Participant
Kusha — Analyst
Presentation:
Operator
Ladies and Gentlemen, good day and welcome to the Subros Limited Q4FY26 earnings conference call hosted by 361 Capital Market Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing10.0 on your Touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr.
Annamalai Jayraj from 361 Capital Market Private Limited. Thank you. And over to you sir.
Annamalai Jayaraj — Analyst
Thanks. Welcome to Ltd. 4th year FY26 and FY26 post business conference talk from GUR Ltd. Management. We have with us today Mr. Pramod Sumat Dugal, HM Director and CEO, Mr. Keman Kumar Agarwal, Chief Financial Officer and Senior Vice President Finance and Mr. Sukbindan Sigil, Vice President. I’ll now hand over the call to Mr. For the open remark to be followed by question and answer. Over to you Sir.
Parmod Kumar Duggal — Executive Director and Chief Executive Officer
Thank you Mr. Jaraj. Good morning ladies and gentlemen and very warm welcome to all of you to the investor conference call of Subros Limited for quarter four and financial year FY26. A little bit about the Industry the Indian automotive industry is currently witnessing one of the strongest growth pace in the recent year. After a period of moderation in the early part of the financial year, the industry demonstrated a sharp recovery beginning quarter three and momentum has continued through quarter four as well.
The revival has been supported by the robust demand, also the improved customer sentiment, positive impact of GST 2.0, resilient export and sustained infrastructure investment. India continue to strengthen its position as a global automotive and manufacturing hub. Passenger vehicle and commercial vehicle both reported very healthy traction during the quarter while export remained strong across multiple categories. During quarter four of FY26, the overall automotive industry recorded a growth of 23.6 with passenger vehicle growing at 13.2 and commercial vehicle 18.9.
And overall in the financial year the industry has grown by 10.4% with a PV growth of 7.9. As I said, the key growth drivers for the industry continue to be premiumization of passenger vehicle, rising preference of suv, increasing penetration in hybrid and electric mobility, and government focus on localization and manufacturing competitiveness. Against this backdrop, Subros has delivered another quarter of consistent and resilient performance. During quarter four the company achieved a revenue growth of 15.55% while the annual revenue growth stand at 11.52% outperforming several underlying industry segments.
One of the key highlights for the year has been a strong growth in commercial vehicle segment following the implementation of mandatory AC norm for N2 N3 category. Our sales in truck AC segment recorded an impressive growth of 168% in quarter four and 111% for the full year. This reflects both the strength of our product portfolio and strategic focus on diversified mobility solutions. While the industry outlook for the next two quarter remains cautiously optimistic, we continue to closely monitor geopolitical development, particularly tension in West Asia.
These development could potentially impact commodity prices, freight cost, supply chain stability and working capital cycle across the automotive value chain. However, we believe our localization initiative, diversified manufacturing footprint and operational agility position us well to navigate such uncertainties. Coming to our financial performance, as I said, company reported a revenue from operation of Rupees 1,049 crore 76 lakhs during quarter four representing a growth of 15.55 for a corresponding quarter last year.
Our market position continue to be strong. We have secured a share of business of 41% in passenger vehicle segment, truck AC and blower segment. Right now it is truck AC it is 41% and bus AC segment of our share of business is 16% during the quarter. Despite elevated commodity prices and inflationary pressure during the quarter, the company achieved improved profitability through aggressive cost optimization, value engineering productivity enhancement and operational efficiency measures. Certain raw material cost impact continue due to the timing difference in customer compensation mechanism.
Still, we are protecting our margins. EBITDA for the quarter four stood at 100 crores, profit before tax is 66.69 crores while the profit after tax stood at 49.69 crores. Our profitability performance is majorly contributed by localization, cost competitiveness, product mix improvement and also expansion into higher growth technology led segments. From a strategic perspective, the company has continued to strengthen its presence in emerging mobility technologies business. From hybrid electric and CNG vehicles, thermal System has contributed 25% of the total revenue.
The railway business in particular continue to emerge as a significant growth vertical for us. The increased investment in rail infrastructure. This segment is going to grow. We also concluded a new tender of 52 crores in FY26 which will be executed in next subsequent quarter. Our Karcoda Green field project is progressing well. Construction activities are advancing at a full pace. Now the facility started taking shape. Machinery readiness is underway now and SOP will be scheduled by end of quarter two.
The supplies to customer will also be starting aligned to the customer milestones for the new program launches. In addition, we have initiated another expansion of our plant in Kasampura which is mainly focusing on E compression manufacturing. This facility will support EV and hybrid ecosystem through our compression product. Also we’ll be expanding the ICE compressor capacity in this location because Noida is now fully utilized with their existing capacity. So just to summarize our final financial Highlight for Quarter 4 and for the year, revenue from operation is 1049.76 crores for the year 3755 crores with a growth of 11.52.
EBITDA for the year is 362.93 crores with a growth of 5.77% profit before tax for the quarter 66.69 with a growth of 7.86 and 228 crores with a growth of 12.24% and profit after tax 49.69 crore with a growth of 7.56% in the quarter and 165 crores with a growth of 10.22% for the year. So going forward we will remain focused for our technology led growth, localization, import substitution and margin improvement. With our strong customer relationship and expanding opportunities in hybrid and EV thermal management, our strategic investment in capacity expansion and also on the operational excellence, we remain confident that long term growth trajectory for the company is sustained now.
Thank you very much. We are happy to take the question. Thank you.
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star then one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, you are requested to use handsets while asking a question. Ladies and gentlemen. Then wait for a moment while the question queue assemble a reminder to all. You may press Star and one to ask a question. We have the first question from the line of Prakash Kapadia from Kapadia Financial Services.
Please go ahead. Yeah,
Questions and Answers:
Prakash Kapadia
Thanks for the opportunity. A couple of questions from my end. You alluded in the opening remarks commodity prices are elevated and that could cloud the near term outlook. So if I look at aluminum prices, they are more than $3,500 per ton. Copper is still elevated, steel, polypropylene. So you know these are the key commodities for us. So you know, typically based on my understanding the material settlement rate with OEMs happens with a lakh. So in the near term or say in FY27, what kind of you know, EBITDA margins would you know the company be targeting in the near term?
And what is the order book of truck, AC systems and railways as on date? These are my two questions. Thank you.
Parmod Kumar Duggal
Thank you. So you have three questions so I’ll answer one by one. So commodity prices as you said is currently on a escalation basis. So all copper, steel, polypropylene which we normally consume. So the only change point with one of the customer where our current compensation is based on quarter lakh basis. So that means the previous quarter rates will be applied to the next quarter. In view of the current emergent situation we could negotiate monthly indexation instead of quarterly so that the impact is not substantial but because of the compensation is matching with the cost, definitely the ratios will get impacted because if 100 rupees spent and 100 rupees received, of course the markup will not be available.
So beta margin will be under stress. But of course we are trying to optimize that to some other efficiency improvements. The third question you ask about the order book for truck and railway. So order realization for truck because the notification was activated on 8th of June and June month was in the ramp up only. So this year it definitely would be the full year impact. So last year we did truck aircon worth rupees 263 crores. This year we are expecting with some growth in the market roughly in the range of 325 to 350 crores or so.
And on railway we have order book of around 52 crores in hand which will be executed in subsequent quarters.
Prakash Kapadia
Okay. Now you know, if I look at, you know, slightly longer term margin, obviously you have an aspiration of growing the EBITDA margin. But last few quarters, you know, it has been in the 9 to 10% kind of, you know, operating range and we’ve seen, you know, times because of mix as well as commodity inflation going, you know, EBITDA margins going to 6, 7% also. So how does you know one look at EBITDA margins in the near term FY27 for the year as a whole, what could be, is it possible to maintain margins with some of the cost control initiatives which you said depending on the mix or order book or it is fair to expect there will be some moderation in EBITDA margins from here on.
Parmod Kumar Duggal
So I’ll say that FY27 will be a more pressed year for us because we don’t see a geopolitical situation is likely to improve very instantly. It will take time and it will take Time. Even the post resolving the issue stabilization will take time. So commodity prices will be the key challenge throughout the year. However, as an organization we are still very confident to maintain the current level of ebitda whatever we have with some moderation, improvement or rationalization. But going forward, once the situation will be normalized, we have plans to improve this beta margin through the model mix, through the product mix, new technology product with some premisation, also through the localization, our aspiration to get into two digit.
Whatever target we have set for the long term still are intact.
Prakash Kapadia
Fine, that’s helpful. I’ll join back. Thank you. If I have more questions. Thank you.
Operator
Thank you. The next question is from the line of Arjun Khanna from Kotak Mutual Fund. Please go ahead
Arjun Khanna
Sir. Thank you for taking my question. The first question is just while we talked of raw material and commodities, could you talk on the labor aspect? So we are hearing that post the settlement there’s been a substantial jump in labor costs. So has that impacted us? And B, are we in a position to pass that on in our agreements?
Parmod Kumar Duggal
So yes, there would be impact of labor wage settlement for sure. Not only limited to the geographies where the minimum wages have been revised but in other geographies also as a benchmark. As far as the compensation is there, since the impact is huge, we have, we are in discussion with the customer for compensation. There is an indexation concept available on the wage settlement also. So substantial part of this increase will get compensated for customer. This is why we are very confident.
Arjun Khanna
Sure. And second bit on the Forex since we continue to import products from Japan and the currency has moved adversely for us. So assuming our payouts have increased, historically that’s been a pass through. So that continues to be the case.
Parmod Kumar Duggal
Yes, of course. Foreign exchange compensation, commodity price indexation is part of our pass through arrangement with customers.
Arjun Khanna
Sure. The last bit in terms of our absolute ebitda. So if I look at this quarter while our top line has grown absolute EBITDA and as you have mentioned, it’s not fair to look at percentages because of the base impact. But absolute EBITDA growth has not been as strong. So is this because of the lead lag nature of pass throughs? Is that the right way of understanding?
Parmod Kumar Duggal
Yes, it is because of two reasons. One is that in the last year up to even quarter four the lag was there because one quarter lag is there. Second increase within the quarter was also very steep post 28th of February. In the month of March itself, the prices have shoot up and that is absorbed in the cost. So there is a substantial impact of.
Arjun Khanna
The last question is that for the Carcoda facility there seems to be a movement for our OEM in terms of bringing out production. So in terms of the ramp up of this facility, what kind of ramp up we anticipate for this year and next year.
Parmod Kumar Duggal
So our facility will start in the second half of the year. So that means early second half. So the models which we have planned from this facility would be the Briza and also the Victoris and all subsequent models which are lined up in Maruti to be rolled out from Karkura. So our expectation is that the one line of H Vac and one line of hosen pipe and other products which we have set up within maybe two years we’ll be able to realize 100% of the capacity which is set up there.
Arjun Khanna
Sure. Thank you very much and wishing you all the best, sir.
Parmod Kumar Duggal
Thank you.
Operator
Thank you. Before we take the next question, before we take the next question, a reminder to all. You may press star N1 to ask a question. We have the next question from the line of Mayur Parker from Wealth Managers India Private Limited. Please go ahead.
Mayur Parkeria
Good morning sir. Thank you for taking my questions in a challenging environment. A stable set of numbers. So just had a couple of questions on. Again just harping on this margin aspect From June from Q1 Q2 of FY26 we had seen the impact of material cost and the currency movements you had highlighted from where our margins actually started coming down with a downward bias table With a downward bias. So is it fair to say that the cost impact, the cost increases even in this quarter? We saw material cost as a percentage continue to rise, which you already highlighted too.
But will it be fair to say that till December all the increases and the forex impact had been has been absorbed in rupee terms? It is just that the March quarter impact remains to be adjusted as we go ahead.
Parmod Kumar Duggal
I’ll say it’s a fair assumption because as I said before, the indexation before was on quarterly basis. So that means up to December all impact in foreign exchange commodities have been factored in in quarter four. But quarter four impact will be compensated in subsequent quarter that is quarter one of this year. So your assumption is right.
Mayur Parkeria
Okay. Okay. So sir, that means since, since now we have moved to the rupee, you know, fairly so that you know the rupee value will get compensated rather than the markups and the percentage. I I just got one clarification question understand is when you said that we will endeavor to keep the EBITDA stable? Is it in margin terms at 9 close to 9% or is it in rupee terms for the M527?
Parmod Kumar Duggal
We will moderately improve from the absolute values because we don’t know how the impact is going to shape up in next three quarters. Right now it’s completely uncertain of geopolitical development. So through the compensation formula, whatever is agreed and it will be further strengthened to support the supplier base or the ecosystem. So right now we can talk only on absolute term, not on a percentage.
Mayur Parkeria
Right? Right, right, right. Sir, on the you mentioned that from the truck AC segment we are expecting around 350cr for the next year. So I believe this will be largely in H1. It will be done right, the base because it started from two quarters, so the second half we will see the growth moderating substantially. Will it also be a fair assumption?
Parmod Kumar Duggal
So truck market last year has grown by around 10% or so. So of course the impact of AC is only to the extent of not fully three quarter, maybe two quarter and half or so this year we’ll have full quarter impact if overall industry right now, which is a trend on, on a positive growth trajectory. So benefit of full year will come starting from quarter one itself.
Mayur Parkeria
Right, but so, so H1 will be a much stronger growth. Right. As as we see because the base also is lower. And then we will have a normal, you know, organic growth for the industry.
Parmod Kumar Duggal
H1 versus H1 of truck. Definitely it will be much larger.
Mayur Parkeria
Okay, okay. And sir, from a milestone perspective on the you capacity and on the utilization, just some clarification. The electric compressor facility will be operational since when? In FY27?
Parmod Kumar Duggal
No, it would be by middle of 2728 because it is aligned to the customer vehicle SOP targets. So our facility will be ready with all equipment by January 27th or maybe March 27th in that quarter. So after that the validation process and the customer trials for the vehicle will start and it would be operational in most likely third quarter of FY27, 28.
Mayur Parkeria
Okay, third quarter. The current 25% share of the hybrids as well as the electric which we have currently in the overall revenues post this in another eight once we start this, you know, this facility. And as more ramp ups happen in SOPs, we believe that in next two years this number can substantially undergo a meaningful change. Right.
Parmod Kumar Duggal
Of course, because compressor is a high value commodity. So definitely it will have substantial impact on overall revenue from the alternative fuels as compared to the ice. As of now,
Mayur Parkeria
Sir, what will be the true total potential of this at a Peak capacity
Parmod Kumar Duggal
Of electric compressor.
Mayur Parkeria
Yes sir.
Parmod Kumar Duggal
So it is around, as of now the visibility is around 250 crore per year
Mayur Parkeria
Revenue revenues which can.
Parmod Kumar Duggal
Yes.
Mayur Parkeria
Okay, thank you sir. I’ll come back in the queue for the subsequent mission. Thank you.
Operator
Thank you. We will take the next question from the line of Mihirvo from Equity securities Private Limited. Please go ahead.
Mihir Vora
Yeah, thank you for taking my question. So just my question was on the current scenario where there are multiple issues in terms of, you know, freight, you know, container availability, freight cost and such kind of issues. So are we facing any kind of issues in terms of supplies on our inputs or are our OEMs facing some kind of supply chain challenges, some color on that front?
Parmod Kumar Duggal
So yes, as part of the disruption, container prices are going up. The availability and the cycle of import from Japan to India, between China to India and Europe to India has increased. The lead time has increased. And that’s why if you see our stocks have increased means the inventory has increased because we built up some inventory to offset these kind of disruptions so that there is no impact finally to the OEM in terms of our supplies to them. But yes, we are keeping a close watch on them even though the lead time is more.
But we have improved our ordering cycle to get aligned to our customer requirement.
Mihir Vora
So it will be more of a lead time problem rather than availability of components.
Parmod Kumar Duggal
Correct, correct, that’s true.
Mihir Vora
Okay, and in terms of OEM side also the like in terms of their dispatches and stuff, those things are on track right now. So nothing to note of.
Parmod Kumar Duggal
I cannot comment on behalf of them. But of course whatever forecast we have received for next three months or four months, there is no much change as compared to the price.
Mihir Vora
Okay. Okay. So in second point on the CapEx which we had announced for the ecompressor and I think other capexes as well. So what kind of inflation are you seeing on the CAPEX comp?
Parmod Kumar Duggal
So we already announced that E compressor will be spending around 175 crore rupees. And for Karakoda we propose an investment of 150crore rupees. So these will be our investments for greenfield project or project expansion other than our routine replacement capex.
Mihir Vora
Yeah, yeah sir, but this was the cost which we had announced last quarter. Last last quarter. But here basically. Are we seeing any inflation because of the scenario?
Parmod Kumar Duggal
No, not exactly because orderings were done much before. So commitments have already been included in this. So we don’t see a much bigger variation.
Mihir Vora
All right, all right. Okay sir, lastly on the E compressor part Once we commission the plant, it will be a sort of higher import content there and then where we will localize or there is some localization plan on that front in terms of components.
Parmod Kumar Duggal
So it is planned in three phases. Our phase one will be more of child part component import with the assembly here because a very highly technical product. But phase one and phase two and our final aim is to do localization to the extent of 70% of the total component being used.
Mihir Vora
Okay. Okay. All right. Okay, thanks. That’s all from myself.
Operator
Thank you. We will take the next question from the line of Naman from Sanghvi family office. Please go ahead.
Mihir Vora
Hi. Actually majorly all the questions have been answered. Just wanted to understand one thing that recently the government announced a ban on the consumer ac. So is there a policy uncertainty for us also in the near future or we think we are well equipped even if there is any adverse regulatory change. So just wanted some clarity on that.
Parmod Kumar Duggal
You are referring to consumer AC for home usage?
Mihir Vora
No, no, no. So can some regulation of that sort come even for, you know, the ACs that we put in the car? So for from the compression compressor angle?
Parmod Kumar Duggal
No, no, no, no. There is nothing. There’s nothing. There’s no such thing regulation expected as of now.
Mihir Vora
Okay, okay. And we are well equipped with indigenous production itself, right?
Parmod Kumar Duggal
Yeah, of course, of course.
Mihir Vora
Okay. Okay.
Operator
Thank you. We will take the next question from the line of Mukul from Autocar. Please go ahead.
Mukul
Thank you. Sir. I just want to understand among when we look at the future, there’s a lot happening in terms of geopolitical as well as energy crisis in India and elsewhere. Wanted to understand where exactly would you be investing and where would you be exactly focusing in terms of powertrain especially from energy point of view for the next three physicals.
Parmod Kumar Duggal
So very complex question. Geopolitical situation is uncontrollable at our end. But what we can to align our focus and investment into technologies which are required for the future cars. So there are two elements to that. One, of course the ICE engine will remain. It is not going to be wiped off completely. We are investing to upgrade our products to make more efficient thermal solution provided to ice car with the lower fuel consumption and lighter weight products so that it can optimize on the mileage part of that.
The second aspect is on the electrician where the electric car or hybrid car penetration is going to increase rapidly. So what product alignment is to provide thermal solution for these cars which will increase the scope of thermal supply per car. Because the system is much elaborated including the Battery cooling as well. So our focus is right now on the technology which is suitable for powertrain whatever is finally be dominating the future market in next five to 10 years.
Mukul
Thank you sir. Just a small add on to this. Will these technologies that you’re working on would be agnostic to what is what are being called now as plug in hybrids and or range extender electric vehicles as well. Do you see some potential there for these technologies? No.
Parmod Kumar Duggal
So these technologies, whatever we are going to launch or right now in, in the pipeline will be agnostic to any powertrain switch.
Mukul
Thank you sir.
Operator
Thank you. We will take the next follow up question from the line of Prakash Kaparia from Kapadia Financial Services. Please go ahead.
Prakash Kapadia
Yeah, thanks for the follow up. Just you know one clarification I had on you know the operating cash flow you you know alluded there is some built up due to you know the supply disruption due to the West Asia war. But you know operating cash flow has you know declined substantially from 175 to 105 crores this year. And even you know if I look at over a period of time, say last five, six years, you know our sales have almost doubled but operating cash flow has you know not kept up pace. So you know post Covid we were like roughly 2000 crores.
Today we are 3756 crores. Then operating cash flow was 239 crores. Today it is 105 crores. So how will this ratio improve from year on? Because you know the OCF to EBITDA is actually declining from around 130% to around 55%. So or is it you know a blend of margin and cash flow we are targeting. How do we you know look at this ratio in the near term.
Parmod Kumar Duggal
Will you take this question please.
Unidentified Participant
So whatever figure you are referring, where from your refereeing these figures. One, two,
Prakash Kapadia
These are all figures
Unidentified Participant
You have 175. You have read somewhere
Prakash Kapadia
Last year’s operating cash flow.
Unidentified Participant
So last year operating cash flow is 231 or 174 now 105, right?
Prakash Kapadia
Yes, yes, absolutely.
Unidentified Participant
Yeah. So the major contributor to this is that earlier we were having a CAS discount facility with our customers where we are were taking early payment from them. So if you see the trade receivable has gone up by 124 crores. So now we have moved to the normal cycle of the credit terms. One number two, with the increase in the volume in the quarter four and increased raw material prices, inventory and receivable both has gone up further terms.
Prakash Kapadia
Right?
Unidentified Participant
Yeah. So that’s how it is changed drastically the ratio is changed and which is in the ordinary course of business. So nothing extraordinary. So now it is based on the credit cycle agreed with the customers and inventory is definitely little on higher side. Now because of the global scenario. The late delivery of the container dispatches from Dubai was that the cycle which was earlier of 25 to 28 days is taking 45 to 60 days. So that’s how when the container was stuck in on the way all containers received at one point of time that has resulted our increase in inventory also this.
Prakash Kapadia
So maybe, maybe the current cash flow from operations to EBITDA is looking depressed because of some of these things. But it could definitely be better from year on. Maybe not 55% but 70, 75%. Is that the ratio ideally we should look at in the. You know, once things stabilize or
Unidentified Participant
On. On the contrary, by virtue of these reasons by withdrawing this cash discount deliver margins has gone up because it was at a cost. So let us add it to the bottom line also in the.
Prakash Kapadia
Okay, okay. So maybe this is depressed but definitely it should improve from here on is what directionally we should look at. Right? Sure. Yeah. Thank you.
Operator
Thank you. We will take the next question from the line of Omesh Madgar from Rishi Financial Services. Please go ahead.
Mihir Vora
Yeah, thank you for the opportunity. I would like to know what sort of capacity increase are we expecting from this new Cargoda plant that will come up and the revenue that we are expecting for this year and next year. That is the first question.
Parmod Kumar Duggal
Okay, so capacity increase by which expansion of greenfield project will be adding roughly half a million of H Vac and Hosen tube capacity in this location. And as I said that in next two years time after the SOP start, we will be able to utilize this plant capacity to the extent of 90% to 95% or so. And of course the revenue will be aligned to this. It would be roughly 200 to 250 crores Delta revenue which will be coming in once we have the full utilization of this. This plant.
Mihir Vora
Right. So currently how much would be the. Would be the capacity for H Vac and. And the pipe that you mentioned.
Parmod Kumar Duggal
So current capacity we have for H vac is roughly 2.6 million all across other plant location. Nine plant location and hosen tube is around 2.3 million. Some pressure we have around 2.2 million. And heat exchanger we have variably in in the range of around 2.4 to 2.5 million.
Mihir Vora
Okay, and so you mentioned that you are looking out for a localization going ahead. And also the E compressor would also come up. So for the next year, how much of the incremental margins are are you looking at? Considering the status quo means, whatever situation is that remains the same.
Parmod Kumar Duggal
So electric compressor commercialization will not happen in this financial year. This will go to the third quarter of the next financial year. So it is not relevant to include any revenue from compressor at least for the short term right now. But of course our effort on localization is aggressively being pursued right now. Whatever projects are there next financial year, most of them will get realized which will impact our the import substitution for sure. But margin guidelines right now will try to moderately improve the current margin situation.
But right now to spell out any exact number would not be affected.
Mukul
Okay, thank you so much sir. And we show the best.
Parmod Kumar Duggal
Thank you.
Operator
Thank you. We will take the next question from the line of Kusha from 361 capital. Please go ahead.
Kusha
Yeah, thank you so much for taking my question. I just had a couple of questions on the 1200 crore order which we won from Maruti. So when do we expect the ramp up to happen? And how much annual revenue contribution we can expect over the next two to three years?
Parmod Kumar Duggal
So this 1200 crore business was for E compression. And I also spell out that E compression will be commissioned in third quarter of FY 2728. Roughly the potential of this business per year is around 250 crores or so. And the total program life is roughly seven years or so. So that’s how the ramp up will happen as and when Maruti’s programs are commercialized. So it will be aligned to that.
Kusha
Sure, sir. And on the content per vehicle, how much do we expect this to go up from the conventional AC1?
Parmod Kumar Duggal
So content per vehicle with the EV versus ICE normally is 2.5 times or in some cases 3 times. But compressor per se it is between 3.5 times to 4 times. If you only substitute compression versus compressor from ICE to this. So that’s how the content per vehicle will be multiplying. If you take a reference of compression.
Kusha
Understood, sir. And so we can expect a similar margin profile or higher margin profile. From this
Parmod Kumar Duggal
Margin will be initial phase. When we are importing component and doing assembly to supply would be different. But of course when the localization As I mentioned phase one, phase two, the final target is to 70% localization. Then these margins will be definitely better than the existing.
Kusha
Understood, sir. Okay, that’s it from my end. And I wish you all the best. Thank
Parmod Kumar Duggal
You. Thank you.
Operator
Thank you. We will take the next follow up question from the line of Naman from Sanghvi family office. Please go ahead.
Mihir Vora
So sir, just wanted to understand your view. From a three year horizon, you know there are so many OEMs expanding their capacities targeting export markets, right? So not from a short term, but from a three to four year point of view. How do you see the step up? Or how do you see Subros taking center stage with other major OEMs as well? What is the strategy? Could you highlight that?
Parmod Kumar Duggal
So you’re right that Most of the OEMs are adding capacity in next five years. Rajan, from now till 2031, we are also aligning to add capacities in our multiple plant location. And as I said before, this phase one is only adding a half a million of capacity. And phase two will have another half a million of capacity. As OEMs will set up facility in the different part of the country. Wherever we have already plant location available, our expansion in our existing capacities will be aligned to that.
And if there are substantial new development happening, the greenfield project will be initiated. As a strategy, we are the market leader right now, more than 40% share of business. And we intend to keep this leadership position intact for not short term, but for long term also. And whatever is required to keep this position, subrose is committed for that.
Mihir Vora
Okay. And just in line with that, in process of onboarding other new OEMs as well. Apart from like how do we.
Parmod Kumar Duggal
This would be more strategic answer, but I’ll not spell out exactly but yes, we are in this discussion with many OEMs who are expanding their capacities and we are aligned to their future programs. Right now it would be inappropriate to spell out because they are at an initial stage.
Mihir Vora
Okay. Okay. Thank you sir. All the best.
Parmod Kumar Duggal
Thank you.
Operator
Thank you very much ladies and gentlemen. We will take that as the last question. And with that concludes the question and answer session. I now hand the conference back to the management for the closing comment.
Parmod Kumar Duggal
So thank you so much for your continued support and confidence in sucrose. Two things which I want to summarize here. Of course the current situation, which is beyond anybody’s control, geopolitical tensions, of course it has impact on the business. The whole value chain is getting impacted because of that. We need to keep the positivity alive so that our whatever actions we had initiated, they should result it for the betterment of margins revenue as well as our customer engagement. And so as a long term vision, minus this geopolitical tension, our progression in terms of technology advancement in terms of segment advancement, in terms of margin improvement and our consistent growth is intact.
And that’s where our confidence is to remain our market leadership position. Thank you so much. Good luck.
Operator
Thank you. Members of the management, on behalf of 361 Capital Market Private Limited, we conclude this conference. Thank you all for joining us. And you may now disconnect your lines. Thank you.