Hold Wabco India; target of Rs 6510: ICICI Direct

ICICI Direct's research report on Wabco India

Wabco India (WIL) reported a muted performance in Q1FY20. WIL's revenues for the quarter declined 14.7% YoY to Rs 638 crore. EBITDA came in at Rs 87.0 crore with attendant EBITDA margins at 13.6% (up 76 bps QoQ). The company realised better gross margin expansion than anticipated (up 89 bps QoQ), with other expenses also supportive. Employee costs as a percentage of sales, however, rose 75 bps sequentially. Consequent reported PAT fell 26.7% YoY to Rs 54.8 crore.

Outlook

Valuing the stock at 39x FY21E EPS of Rs 165.8, we ascribe a target price of Rs 6,510 and maintain our HOLD rating.