Subros Limited announces a new order win

Kharkhoda’s ultimate planned installed capacity is approximately 9.5 lakh units, or 0.95 million units. Phase 1 is 4.75 lakh units and Phase 2 adds a further 4.75 lakh units. Management has also rounded this to 0.5 million units per phase, or roughly 1 million units in total. ^{[1] [2]}

The capacity-utilization impact versus FY24 cannot be quantified reliably from the available figures because the FY24 Annual Report baseline—product-wise installed capacity, production/output, and utilization percentages—could not be confirmed. The plant was still under construction/machine-readiness phase, with SOP targeted for Q3 FY27, so there is no reported post-Kharkhoda company-wide utilization actual yet. ^[1]

What the addition means mechanically

• Before ramp-up: Adding capacity without a corresponding increase in output would reduce the reported utilization ratio because the denominator rises while production is unchanged.
• At full build-out: Kharkhoda adds about 0.95 million units to the company’s capacity base, but the company has not provided a reconciled company-wide utilization percentage incorporating this addition.
• Ramp-up expectation: Management indicated that the plant could reach approximately 90–95% utilization within two years of SOP. ^[2] This is a management expectation, not an achieved metric.
• Current comparison point: The latest operating-capacity figures cited by management were approximately 2.6 million HVAC units and 2.3 million hoses-and-tubes units across existing locations; Kharkhoda’s 0.5-million-unit Phase 1 addition is not allocated between those two product categories, so it should not be mechanically added to either line individually. ^[2]

Bottom line: Kharkhoda expands the company’s eventual capacity by roughly 9.5 lakh units, but it does not yet translate into a measurable change in reported overall capacity utilization. A precise FY24-to-post-expansion bridge requires the FY24 Annual Report’s capacity and output denominators plus actual Kharkhoda production after commissioning.

Kharkhoda’s stated investment is Rs 150 Crores, but this is a proposed project investment, not a separately reported amount confirmed as fully capitalized. Management disclosed the figure for Kharkhoda alongside approximately Rs 175 Crores for the e-compressor project ^[2].

The accounting figures align as follows:

• FY26 company-wide Capex: Rs 149.57 Crores ^[3]. This is broadly equal to the proposed Kharkhoda investment, but the filing data does not establish that the entire amount relates to Kharkhoda; it may include routine replacement capex and other projects.
• CWIP at Q4 FY26: Rs 52.62 Crores ^[4].
• CWIP in the latest reported quarter, Q1 FY27: Rs 52.62 Crores, carried forward as the latest value ^[5].

Interpretation: the Rs 52.62 Crores CWIP balance represents only the capitalised work still under construction at the reporting date; it should not be treated as the total Kharkhoda project cost. The unchanged balance through Q1 FY27 is consistent with the plant still being under development, with commercial production targeted for Q3 FY27 ^[1]. The available figures therefore support partial investment remaining in CWIP, but do not permit a precise plant-wise reconciliation between the Rs 150 Crores proposed project cost, Rs 149.57 Crores total company capex, and Rs 52.62 Crores CWIP.

The Kharkhoda greenfield facility’s projected asset turnover is approximately 1.33–1.67x, below Subros’s latest reported consolidated asset-turnover benchmark of 1.88x in FY26. On this proxy, the facility would operate at roughly 0.21–0.55x lower turnover, or 11–29% below the FY26 company-level ratio.

Calculation

Interpretation: even at the upper end of the expected revenue range, Kharkhoda’s implied turnover of 1.67x remains below the FY26 company benchmark of 1.88x. At Rs 200 Crores of revenue, the gap is wider at approximately 0.55x; at Rs 250 Crores, it narrows to approximately 0.21x. These are derived comparisons from the disclosed investment and revenue figures.

The comparison is directional rather than fully like-for-like. The Kharkhoda calculation uses proposed project investment as the asset base and incremental revenue as the numerator, whereas Subros’s historical ratio is consolidated asset turnover across the existing business. A separate manufacturing-unit asset-turnover series based strictly on segment-wise Annual Report assets and revenue could not be confirmed. The project ratio may also improve if Phase 2 capacity is added without a proportionate increase in the asset base, but that would require further investment and revenue disclosure.

^[2][6][7][8]