Wabco India Q2 Review - High Quality CV Cycle Play: ICICI Securities
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ICICI Securities Report
Wabco India Ltd.’s Q2 FY22 operating earnings were in line with consensus estimates as Ebitda margin came in at 10.2% (down 491 basis points YoY).
Revenues grew ~47% YoY; however, gross margin came in at 36.7% (down 630 bps) amid steep raw material inflation.
We like Wabco India’s underlying business 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 ZF Group and
best-in-class technology leadership (from parent ZF Group) is likely to accelerate new product introduction (e.g. electronic stability control, air disc brakes, services) for customers.
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