ZF Commercial Vehicle Control Systems India Ltd. share price target

Valuations (81x FY20P EPS of 84) at WIL, in our opinion are disconnected from prevailing challenges on the demand front, with relative resilience in price performance centred around market expectations around the open offer price. On the back of elongated CV recovery cycle, we assign SELL rating on WIL and advice existing investors to either tender their shares in the forthcoming open offer ( 7067.5/share, 2.5 months away) or for simplicity of operations sell shares in open market. We ascribe a fair value...

Q4FY20 revenue de-grew by -39%YoY due to significant decline in the commercial vehicle volume, down by 48%YoY. This was largely due to production lockdown and lower demand globally. EBITDA margin came at 12.8%(-10bbs YoY), due to lower input cost and higher other expenses. Net profit tanked by -35.3%YoY. WIL technological advantage in the CV segment will provide significant growth and will results in better bargaining power with the original equipment manufactures (OEMs)....

WIL technological advantage in the CV segment will provide significant growth and will results in better bargaining power with the original equipment manufactures (OEMs). Government's impending scrappage policy expected in FY21 will spur additional demand in the CV sector. WIL holds 85% market share in the air braking systems of CV. We expect the revenue and PAT to grow by 15%/26% CAGR over FY20-22E owing to its higher participation in the segment....

Increasing wallet share key to mitigate CV pain, going forward! The domestic CV space is currently witnessing a sharp slowdown brought on by NBFC-led liquidity and financing crunch, overcapacity caused by revised axle load norms and poor freight demand. Coupled with the inherent cyclicality of the segment, prospects for meaningful volume growth over the medium term appear bleak. With WIL being a dedicated CV play, the same is seen adversely impacting the company also, albeit to a lesser extent, given its demonstrated ability and continued focus on increasing wallet share per...

WIL is a leading ancillary play that caters to braking solutions requirements of domestic CV OEMs. Over the years, the company has comprehensively outpaced OEM volume growth in this segment on the back of rising wallet share (WIL revenue CAGR over FY15-19P 20.6% vs. CV industry volume CAGR 13.1% in this period). Domestic demand sentiments in the CV space remains muted currently but significant pre-buying ahead of BS-VI implementation is anticipated in Q2FY20E & Q3FY20E, which would support growth at players like Wabco. We expect domestic CV space to witness...

ICICI Securities Ltd | Retail Equity Research Wabco India (WIL) reported a healthy Q3FY19 performance WIL's revenue grew 7.7% YoY to | 700 crore. While net sales amounted to | 653.2 crore (up 6.1% YoY), other operating income grew 35.8% YoY to | 46.7 crore. We estimate that the core Air Actuation System segment and exports would each have grown ~5% YoY. Other operating income includes income from Merchandise Exports from India Scheme (MEIS)...

ICICI Securities Ltd | Retail Equity Research Wabco India's (WIL) revenues grew 21.8% YoY to | 743 crore, above our estimate of | 733 crore. Growth was supported by domestic business, which grew 32.1% YoY to | 533 crore, led by higher M&HCV; volume & increase in content per vehicle (better/higher weightage products as required by OEMs), post the new axle norms. In terms of domestic revenue mix, OEM revenue was at | 383 crore (includes ABS revenue of | 69 crore) & spares revenue at | 71 crore....

ICICI Securities Ltd | Retail Equity Research Wabco India's (WIL) revenues grew 42.2% YoY to | 747 crore, above our estimate of | 716 crore. Revenue from domestic business grew 56.2% YoY to | 534 crore mainly due to low base of last year and ongoing demand drivers (high infrastructure spends, overloading restrictions) in the CV space. In terms of revenue mix, OEM revenue | 422 crore (includes ABS revenue ~| 97 crore), revenue from spares & operating income were | 79 crore & | 34 crore, respectively. Its exports increased 16.1% YoY to | 213 crore driven by strong order...

ICICI Securities Ltd | Retail Equity Research Wabco India (WIL) reported its highest ever quarterly revenue at | 784.9 crore (up 36.1% YoY) vs. our estimate of | 715 crore. Revenue from domestic business grew 35% YoY to | 583 crore due to stricter implementation of overloading & higher infrastructure development. In terms of revenue mix, OEM revenue - | 469 crore (includes ABS revenue ~| 141 crore), revenue from spares & operating income was | 76 crore & | 37 crore, respectively. Its exports increased 39.3% YoY...

ICICI Securities Ltd | Retail Equity Research Wabco India's (WIL) Q3FY18 revenues came in at | 650 crore (up 32.7% YoY) vs. our estimate of | 627 crore. Revenue from domestic business increased ~34% YoY to | 466 crore and outperformed the M&HCV; industry (production up 21.1% YoY in Q3FY18). The higher M&HCV; demand was mainly due to pre-buying on account of mandatory norm of air ventilation system in trucks sold after December 31, 2017. WIL's domestic revenue mix was at - OEM...