Wabco India Q4 Review - Strong Play On Exports, Domestic Truck Revival: ICICI Securities
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ICICI Securities Report
Wabco India Ltd.’s Q4 FY21 earnings missed consensus profit expectations even as it surprised positively on growth (topline grew 76% YoY).
Ebitda margin contracted 106 basis points YoY to 11.7% due to commodity price inflation (gross margins down 979 basis points).
We structurally like the company’s business on:
- dominant market share (more than 85%) in domestic medium and heavy commercial vehicle industry,
- domestic truck industry is likely to remain on growth path well into FY24E with scrappage policy also likely to act as a demand buffer during the same period, and
- strong technology support (ZF Group) is likely to aid new product/content introductions (e.g. electronic stability control, air disc brakes, services) for both domestic/export market.
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