Buy WABCO India, target price Rs 7350: ICICI Direct

Buy WABCO India, target price Rs 7350:  ICICI Direct

ICICI Direct has buy call on with a target price of Rs 7350. The current market price of WABCO India Ltd. is Rs 5535.

WABCO India Ltd., incorporated in the year 2004, is a Mid Cap company (having a market cap of Rs 11575.16 Crore) operating in Auto Ancillaries sector.

For the quarter ended 31-12-2020, the company reported a Standalone Total Income of Rs 574.31 Crore, up 33.63 % from last quarter Total Income of Rs 429.79 Crore and up 25.74 % from last year same quarter Total Income of Rs 456.74 Crore. Company reported net profit after tax of Rs 52.43 Crore in latest quarter.

Investment Rationale
The brokerage holds a positive view on WIL amidst the cyclical upturn in its user segments i.e. Commercial Vehicles, promoter’s intent to increase global sourcing from its Indian arm and wider product basket post the global acquisition of its erstwhile parent by ZF group. Henceforth the brokerage recommends investors to subscribe in the upcoming OFS. With forward assumptions & financials remaining unchanged, it retains BUY rating on the stock with unchanged target price at Rs 7,350 i.e., 45x P/E on FY23E EPS of Rs 164/share.

Promoter/FII Holdings
Promoters held 93.1 per cent stake in the company as of Sept 30, 2020, while FIIs held 0.2 per cent, DIIs 0.5 and public and others 6.5 per cent.

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