ICICI Direct is bearish on Wabco India has recommended sell rating on the stock with a target price of Rs 5500 in its research report dated May 25, 2020.
ICICI Direct's research report on Wabco India
Wabco India (WIL) reported muted performance in Q4FY20 on the back of sharp decline in CV space. Net sales came off by 38.9% YoY to ₹ 405 crore. EBITDA for the quarter came in at ₹ 52 crore with corresponding EBITDA margins at 12.8% (down 88 bps QoQ). Consequent PAT in Q4FY20 stood at ₹ 32 crore, down 39.6% YoY. Full year FY20 sales stood at ₹ 1,930 crore (down 32.4% YoY) and consequent PAT at ₹ 159 crore, down 44% YoY. Dividend per share for FY20 stood at ₹ 10/share
Outlook
On the back of elongated CV recovery cycle, we assign SELL rating on WIL and advice existing investors to either tender their shares in the forthcoming open offer (₹ 7067.5/share, 2.5 months away) or for simplicity of operations sell shares in open market. We ascribe a fair value of ₹ 5500 to WIL i.e. 65x P/E on FY22EPS.
For all recommendations report, click here
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