AgenciesRelated
has buy call on with a target price of Rs 9582. The current market price of ZF Commercial Vehicle Control Systems India is Rs 8037.3.
Time period given by analyst is one year when ZF Commercial Vehicle Control Systems India Ltd. price can reach defined target.
ZF Commercial Vehicle Control Systems India Ltd., incorporated in the year 2004, is a Mid Cap company (having a market cap of Rs 15228.88 Crore) operating in Auto Ancillaries sector.
ZF Commercial Vehicle Control Systems India Ltd. key Products/Revenue Segments include Air Assist/Full Air Actuation Systems (Auto/Non-Auto) and Elements The, Spares And Others, Other Services, Software Services, Other Operating Revenue and Scrap for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Standalone Total Income of Rs 791.12 Crore, up 19.54 % from last quarter Total Income of Rs 661.81 Crore and up 10.04 % from last year same quarter Total Income of Rs 718.91 Crore. Company reported net profit after tax of Rs 56.60 Crore in latest quarter.
Investment Rationale
ZF CV India’s (ZFI) Q4FY22 operating performance was a beat as EBITDA margin came in at 11.4% (up 240bps QoQ) driven primarily by operating leverage benefits. Receding RM cost pressures ahead and governmental push towards higher infra spends augur well for the company as it has a dominant share in the M&HCV braking solutions market. ZFI has started supplying compressors for EV buses to leading domestic OEMs. It is gearing up for electronic stability control systems being made mandatory for buses from FY23. Aftermarket business was up ~28% in FY22 (~14% of revenue) with exports remaining flat YoY. It likes ZFI’s underlying fundamentals founded on: i) dominant market share (>85%) in domestic M&HCV industry for braking system solutions, and thus see it as a clear beneficiary of the imminent multi-year growth cycle; ii) strong export opportunities from both existing customers and parent ZF group; and iii) best-in- class technology leadership (from parent), which will likely accelerate new product introduction (e.g. ESC, air disc brakes, services). The stock remains one of the best proxies to play the M&HCV upcycle. It values ZFI at a DCF-based target price of Rs9,582, implying 36x FY24E EPS, and maintain BUY. It has kept revenues/earnings for FY24E largely unchanged, though it has cut target price by ~10% to factor-in higher capex for business transformation towards EVs/new-age solutions.
Promoter/FII Holdings
Promoters held 75.0 per cent stake in the company as of 31-Mar-2022, while FIIs owned 0.71 per cent, DIIs 16.45 per cent.
Time period given by analyst is one year when ZF Commercial Vehicle Control Systems India Ltd. price can reach defined target.
ZF Commercial Vehicle Control Systems India Ltd., incorporated in the year 2004, is a Mid Cap company (having a market cap of Rs 15228.88 Crore) operating in Auto Ancillaries sector.
ZF Commercial Vehicle Control Systems India Ltd. key Products/Revenue Segments include Air Assist/Full Air Actuation Systems (Auto/Non-Auto) and Elements The, Spares And Others, Other Services, Software Services, Other Operating Revenue and Scrap for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Standalone Total Income of Rs 791.12 Crore, up 19.54 % from last quarter Total Income of Rs 661.81 Crore and up 10.04 % from last year same quarter Total Income of Rs 718.91 Crore. Company reported net profit after tax of Rs 56.60 Crore in latest quarter.
Investment Rationale
ZF CV India’s (ZFI) Q4FY22 operating performance was a beat as EBITDA margin came in at 11.4% (up 240bps QoQ) driven primarily by operating leverage benefits. Receding RM cost pressures ahead and governmental push towards higher infra spends augur well for the company as it has a dominant share in the M&HCV braking solutions market. ZFI has started supplying compressors for EV buses to leading domestic OEMs. It is gearing up for electronic stability control systems being made mandatory for buses from FY23. Aftermarket business was up ~28% in FY22 (~14% of revenue) with exports remaining flat YoY. It likes ZFI’s underlying fundamentals founded on: i) dominant market share (>85%) in domestic M&HCV industry for braking system solutions, and thus see it as a clear beneficiary of the imminent multi-year growth cycle; ii) strong export opportunities from both existing customers and parent ZF group; and iii) best-in- class technology leadership (from parent), which will likely accelerate new product introduction (e.g. ESC, air disc brakes, services). The stock remains one of the best proxies to play the M&HCV upcycle. It values ZFI at a DCF-based target price of Rs9,582, implying 36x FY24E EPS, and maintain BUY. It has kept revenues/earnings for FY24E largely unchanged, though it has cut target price by ~10% to factor-in higher capex for business transformation towards EVs/new-age solutions.
Promoter/FII Holdings
Promoters held 75.0 per cent stake in the company as of 31-Mar-2022, while FIIs owned 0.71 per cent, DIIs 16.45 per cent.
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