ZFCVCS (ZFI)’s operational performance with EBITDA at INR1.3bn (-8% QoQ) was below our estimate of INR 1.6bn. Revenues were up 3% YoY at INR 8.9bn with OEM/export/aftermarket segments’ revenues at INR 4.8bn/INR 2.0bn/INR 1.1bn, and growth of ~19%/(29%)%/10% YoY. EBITDAM was at 14.9% (+20bps QoQ), driven by gross margin improvement of +40bps, partially offset by higher employee expenses. We are building in ~13% revenue CAGR for FY24-26E with mean EBITDAM of ~16%.
OutlookWe have cut our revenue and margin estimates due to subdued CV retails in recent months, and lower Q3 revenue, leading to 9%/16% cut in FY24E/FY25E EPS. Downgrade to REDUCE (from Hold) with a DCF-based TP of INR 14,003 (earlier INR 14,903), implying 43x FY26E EPS.
For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
ZF Commercial Vehicle Control Systems - 0122024 - iciciDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
