Reduce WABCO India, target price Rs 4465: ICICI Securities

ICICI Securities has given a reduce rating to WABCO India with a target price of Rs 4465. The share price moved up by 0.36 per cent from its previous close of Rs 4973.15. The stock’s last traded price is Rs 4991.

WABCO India Ltd., incorporated in the year 2004, is a Mid Cap company (having a market cap of Rs 9469.57 Crore) operating in Auto Ancillaries sector.

Financials
For the quarter ended 30-09-2020, the company reported a Standalone sales of Rs 418.71 Crore, up 152.29 % from last quarter Sales of Rs 165.97 Crore and up 6.68 % from last year same quarter Sales of Rs 392.50 Crore Company has reported net profit after tax of Rs 35.11 Crore in latest quarter.

Investment Rationale
The brokerage upgrades FY21E/FY22E earnings by ~104%/12%, respectively, as it factors in strong exports performance in FY21, higher growth rebound in FY22 coupled with partial sustenance of cost reductions. While it likes strong technology and market share moat that WIL enjoys, it is cognizant of the moderate RoCE’s/ high valuations even after factoring strong demand rebound. It rollovers to Sep’22E and maintain target multiple to 35x Sep’22E EPS of Rs128. It upgrades rating to REDUCE from Sell with a revised target price of Rs 4,465 (earlier: Rs3,308).

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.