Hold Wabco India; target of Rs 7200: ICICI Direct

ICICI Direct's research report on Wabco India

Wabco India’s (WIL) revenues grew 21.8% YoY to Rs 743 crore, above our estimate of Rs 733 crore. Growth was supported by domestic business, which grew 32.1% YoY to Rs 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 Rs 383 crore (includes ABS revenue of Rs 69 crore) & spares revenue at Rs 71 crore. Further, its other operating income was at Rs 79 crore, as it includes income from merchandise exports from India scheme (MEIS) of ~Rs 36 crore (of which Rs 25 crore is related to earlier periods). Export revenue remained subdued, up marginally 1.7% YoY to Rs 210 crore, post discontinuance of models by one of its key OEMs.

Outlook

Thus, we maintain our HOLD rating valuing the stock at 34x FY20E EPS, with a target price of Rs 7200. For all recommendations report, click here

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