BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Wabco India Ltd.’s Q3 FY22 Ebitda margin declined 120 basis points QoQ to 9% primarily led by 150 bps decline in gross margin.
Revenues grew ~6% QoQ not cushioning Ebitda margins through superior operating leverage. Following commentary by other auto players, we believe, we are close to peak of raw material cost inflationary pressures for Wabco India too.
We like the company’s underlying fundamentals on:
dominant market share (more than 85%) in domestic medium and heavy commercial vehicle industry, and thus see it as a clear beneficiary of the impending multi-year growth cycle;
strong export opportunities from both existing customers and parent ZF Group; and
best-in class technology leadership (from parent ZF Group), which will likely accelerate new product introduction (e.g. electronic stability control, air disc brakes, services).
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