Buy ZF Commercial Vehicle Control System; target of Rs 11,000: ICICI Direct

ICICI Direct's research report on ZF Commercial Vehicle Control System

ZF Commercial Vehicle Control Systems India (ZFCV) (erstwhile Wabco India), now part of the ZF Group, is the market leader in the CV braking space and a technology-focused complete solutions provider. FY22 sales channel mix – OEM ~45%, aftermarket ~14%, exports ~41% • FY22 Product mix: Sale of products ~91%, Services ~9%.

Outlook

We retain BUY rating on ZFCV given its leadership position in braking solutions in M&HCV domain that is seeing healthy cyclical recovery. We also like ZFCV for its safety led clearly defined route for rising content per vehicle. Introducing FY25E and rolling over valuations, we now value the company at Rs 11,000 i.e. 45x P/E on FY24-25E average EPS of Rs 244.

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