Add WABCO India, target price Rs 7350: ICICI Securities

ICICI Securities has add call on WABCO India with a target price of Rs 7350. The current market price of WABCO India Ltd. is Rs 7056.

WABCO India Ltd., incorporated in the year 2004, is a Mid Cap company (having a market cap of Rs 13389.69 Crore) operating in Auto Ancillaries sector.

Financials
For the quarter ended 31-03-2021, the company reported a Standalone Total Income of Rs 718.91 Crore, up 25.18 % from last quarter Total Income of Rs 574.31 Crore and up 69.96 % from last year same quarter Total Income of Rs 422.99 Crore. Company reported net profit after tax of Rs 47.63 Crore in latest quarter.

Investment Rationale
The brokerage raises earnings for FY23E by ~8% on the back of potential success in new growth levers (domestic) as robust exports demand. New capex plans indicates confidence of parent (ZF) in capabilities of Wabco India. It raises target multiple to 40x (earlier: 35x) FY23E EPS of Rs183 on the back of higher visibility of content increase, margin recovery coupled with early recovery cycle in MHCV segment. It upgrades to ADD from Hold with a revised target price of Rs7,350 (earlier: Rs5,955).

Promoter/FII Holdings
Promoters held 80.4 per cent stake in the company as of March 31, 2021, while FIIs held 0.4 per cent, DIIs 11.2 per cent and public and others 8 per cent.

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