ICICI Securities - Wabco India - Q2 Beat Driven By Exports Performance
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ICICI Securities Report
Wabco India Ltd.’s Q2 FY21 results were a beat (albeit on downbeat consensus expectations) driven by resilient sales performance in exports (up 8.4% YoY), aftermarket division (up 1.7%).
Topline declined approximately 6% YoY to approximately Rs 4.2 billion; however, Ebitda margin improved 329 basis points YoY to 15.1% on the back of strong fixed cost reduction.
On a cyclical basis, we like Wabco India’s underlying business due to -
- dominant market share structure,
- strong volume rebound expectations (approximately 3,540% compound annual growth rate FY21-23) in domestic medium and heavy commercial vehicle industry and
- strong technology support (ZF Group).
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