₹300 to ₹10,170: Debt-free multibagger stock turns ₹1 lakh to ₹33 lakh: Should you buy?

ZF Commercial Vehicle Control Systems India Ltd shares ended today's trading session on the NSE at ₹10,170.00 a piece, up 1.54% from the previous closing of ₹10,015.35

3 min read . Updated: 09 Sep 2022, 05:25 PM IST Vipul Das

A mid-cap company with a market worth of ₹19,094.38 crore, ZF Commercial Vehicle Control Systems India Ltd

Share price history of ZF Commercial Vehicle Control Systems India Ltd

ZF Commercial Vehicle Control Systems India Ltd shares ended today's trading session on the NSE at ₹10,170.00 a piece, up 1.54% from the previous closing of ₹10,015.35. A multibagger return and an all-time high of 3,297.36% can be seen in the stock price, which has soared from ₹299.35 on October 3, 2008 to the current market price. As a consequence, if an investor had invested ₹1 lakh in ZF Commercial shares 14 years ago, the investment return would now have become worth ₹33.97 lakh.

The stock has gained 66.57% over the past five years and 39.15% over the past year. The stock has appreciated 21.13% YTD so far in 2022. On the NSE, the stock had touched a 52-week-high of ₹10,222.95 on (08-September-2022) and a 52-week-low of ₹6,876.50 on (20-June-2022) indicating after creating a new 52-week-high on Thursday the stock is trading 47.89% above the low. At today’s closing price the stock was seen trading above 5 days, 10 days, 20 days, 50 days, 100 days and 200 days Exponential Moving Average (EMA).

Q1FY23 results of ZF Commercial Vehicle Control Systems India Ltd

On a standalone basis, the company reported net sales of ₹798.42 Cr in Q1FY23 compared to ₹491.91 Cr recorded in Q1FY22, which represents a YoY growth of 62%. The company reported total expenses of ₹723.48 Cr in Q1FY23 compared to ₹472.96 Cr in Q1FY22, representing a YoY growth of 52%. The company's profit before tax (PBT) jumped 179% YoY from ₹30.85 Cr in Q1FY22 to ₹86.08 Cr in Q1FY23 and the profit after tax (PAT) or net profit grew by 191% YoY from ₹21.38 Cr in Q1FY22 to ₹62.40 Cr recorded in the quarter ended June 2022.

Should you buy the shares of ZF Commercial?

The research analysts of the broking firm ICICI Securities have said “ZFCV share price has grown at ~12% CAGR from ~ ₹5,640 in September 2017 thereby outperforming Nifty Auto index in that time. We retain BUY on ZFCV amid cyclical upswing in CV space with ZFCV a key beneficiary, solutions in EV domain and advance technologies supporting its quest for content/vehicle increase. Upgrading our estimates, we now value the company at ₹12,160 i.e. 54x P/E on FY24E EPS (earlier target price ₹10,530)."

Amid cyclical recovery, ZFCV build ~29.8% sales CAGR over FY22-24E, and with potential kit value pegged at ~3x from current levels of ~ ₹45,000- 48,000/unit along with input cost cooling off and premium product offering, margins are seen inching up to the 15% mark by FY24E, are the two key triggers for future price performance of ZF Commercial, said the research analysts of ICICI Securities.

They further added that “The company is a key beneficiary of the ongoing CV cyclical upswing amid greater infra spends by the government with annual YTD wholesales at market leader Tata Motors up ~60% YoY in FY23E and August 2022 wholesales witnessing MoM recovery especially in the M&HCV truck space. In Q1FY23 conference call, ZFCV spelt out its prowess in technologically advanced products for M&HCV space like ADAS, fleet management service, EV parts for E-Bus, ESC, T-EBS among others. Recent offerings from some OEMs depict the same. We believe this bodes well for the company in maintaining its leadership position and gradually increasing content/vehicle."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.