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Wabco India Q2 Review - High Quality CV Cycle Play: ICICI Securities

Wabco India Q2 Review - High Quality CV Cycle Play: ICICI Securities

A production associate adds parts to the rear suspension of a vehicle during production. (Photographer: Ty Wright/Bloomberg)
A production associate adds parts to the rear suspension of a vehicle during production. (Photographer: Ty Wright/Bloomberg)

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 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:

  1. 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,

  2. strong export opportunities from both existing customers and ZF Group and

  3. 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.

Click on the attachment to read the full report:

ICICI Securities Wabco India Q2FY22 Results Update.pdf

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